Md. Joynal Abdin
The Financial Express on November 30, 2013
Bangladesh singed the Trade and Investment Cooperation Framework Agreement (TICFA) with the USA on November 25th 2013. Mahbub Ahmed, Commerce Secretary to the government of Bangladesh and Wendy Cutler, Acting Deputy US Trade Representative signed the agreement on behalf of their respective countries. Experts, political leaders including the leftist parties are giving their opinions and trying to relate the country’s present political climate with the signing of TICFA. Arguments and counter arguments are there in favour and against the accord.
There are 16 (sixteen) paragraphs in the preamble of the agreement beginning with the desire of enhancing bonds of friendship between Bangladesh and the USA with the spirit of cooperation in the field of expanding trade and strengthening economic relationship. In this age of globalisation and free market economy, countries are signing bilateral, regional and multilateral trade agreements towards increasing the flow of goods and services, trade and investment in order to explore opportunities for mutual benefit. From this context, the TICFA, in all fairness has the potential of putting in place a mechanism from which both contracting parties can benefit. The Agreement while emphasising the need for strengthening the existing and predictable business environment between the two countries, recognises the ill-effects of trade distorting investment measures and protectionist trade measures. The Preamble also refers to combating corruption and bringing in transparency in matters of trade and investment, which both countries as signatories to the UN convention are obliged to comply with, and recognises recognises the crucially important role of private sector investors, both local and foreign, in case of economic growth and job creation.
The need for reduction of non-tariff barriers (NTBs) for smooth flow of goods and services both-ways constitutes one of the key objectives of the Agreement. The Agreement, it is expected, would facilitate closer examination of the trade impeding NTBs towards addressing those in easing the flow of bilateral trade. There are critical market access barriers for some Bangladesh products such as pharmaceuticals, processed food etc. On the other hand, Bangladesh needs huge investment to remove prevailing bottlenecks. Automation of customs procedures, improving laboratory testing facilities for export, building infrastructure at sea ports, increasing traffic capacities of the highways, construction of bridges are so on would call for massive capital investment. If US investors come forward to invest on a mutual benefit basis, things may improve and we all should welcome such moves.
Protection of intellectual property rights (IPR), implementation of TRIPS agreement, Berne convention related to the artistic, and IP matters are supposed to be implemented by the parties as applicable to the parties. That means Bangladesh does not have to comply with any requirements beyond its international obligations under various treaties, accords, conventions. Bangladesh will enjoy all exemptions allowed to the LDCs. So, apparently we do not have any burden in this regard beyond what is agreed upon under the WTO. However, we will have to be careful in future about committing anything WTO-plus in this regard.
The agreement emphasises on improving workers’ rights in both countries, while promoting and enforcing fundamental labour rights enumerated in the ILO (international labour organization) declaration on Fundamental Principles and Rights at Work and its follow-up. Bangladesh has to be careful to deal with the issue. The country has a long way to go in this regard. The ability of our entrepreneurs and capacity of relevant government agencies have to be considered. We shall not commit anything under this section in future which is beyond our proven capacity. Observance of labour rights is important, and equally, if not more, important is to protect our existing industries and allow the economy to grow further without too many compliance obligations.
As regards the other key issues enumerated in the Preamble, those relating to resolving trade and investment disputes, protecting the environment and seeking to create a mechanism for dialogue for expanding trade and investment are notable.
Now coming to the Articles of the Agreement, it appears that there is nothing in the deal that can warrant fears for Bangladesh. Article-One states that both parties will work together to create and maintain an attractive business environment to diversify trade in goods and services. Article-Two provides for creation a forum to meet at least once a year to discuss bilateral trade and investment issues. Policy makers of both the countries may rethink to include private sector representative and think tanks in the meetings to make them more effective and practical.
Article-Three spells out the areas of activities to be addressed in the forum and would seek private sector and civil society’s advice on matters related to the forum’s work.
Article-Four provides for each party to discuss on a specific trade and investment matter. Article-Five states that the Agreement would be without prejudice to the law, rights and privileges of either party. Article-Six and Article-Seven state the implementation procedures and exit policy for both parties.
From the text of the Agreement, one tends to believe that none of the Articles is designed to infringe upon the rights that Bangladesh as a sovereign nation should be worried about. The important thing is that it provides us a platform where we can discuss trade and investment related matters/disputes for the mutual benefit of both the countries. The forum would also help identify and remove barriers to bilateral trade and investment. Having said so, we have to be more careful before committing anything that might cause difficulty to comply with or might be injurious to the economy. No decision shall be agreed without sufficient discussion with relevant stakeholders.