Unlocking Trade Potentials between Bangladesh and Korea

Abstract

Ever since South Korea came into agreement with Bangladesh on trade and economic cooperation during the mid seventies, the bilateral flow of goods and services acquired new impetus along with accelerated development in other sectors. An economic review of the commodity structure of exports and imports in bilateral trade between these two partners in world economy and the growth in respective national incomes is now attempted to chalk out which of the economic factors might emerge prominent needing policy intervention. With the notion that non-contiguous economies may derive less from bilateral trade cooperation than with the contiguous ones and that industrialized nations look more towards the export markets of the bigger economies, this study analyses that the mutual benefits from vigorous international trade with least-developed populous countries can still be higher in the presence of cooperative environment. The simple gravity equation of bilateral trade involving South Korea and Bangladesh is found to possess good economic potentials of further trade cohesion and reciprocity. The implication of trade growth, in particular, the export growth of both countries being significantly associated with the expansion of gross domestic products and trade projection estimates warrant increasing economic cooperation between these distant economies to harness untapped trade potentials.