America's trade office has listed a plethora of business and investment problems in Bangladesh, such as alleged graft and extortion in commercial dealings.
In a latest report the USTR has also identified barriers in digital trade, violations of intellectual property protection and worker rights, including fire and building safety and freedom of association.
The latest report of the United States Trade Representative , styled 2024 National Trade Estimate Report, on foreign trade barriers mentions these barriers to promoting investment and foreign trade in Bangladesh, which Dhaka takes with exception, though.
"Corruption is a pervasive and longstanding problem in Bangladesh, and anti-corruption law is inadequately enforced," the report reads.
It says American companies have complained about long delays in obtaining approval of licences and bids as Bangladeshi officials "seek bribes".
It alleges there have been continuous proposals to curb the independence of the Anti-Corruption Commission (ACC), the main institutional anticorruption watchdog of Bangladesh.
"Several U.S. companies have claimed that their foreign competitors often use their local partners to influence the procurement process and to block awards to otherwise competitive U.S. company bids".
It reads: "U.S. companies have reported instances of alleged bid rigging in government tenders in Bangladesh. They have also alleged the use of bribery, anticompetitive practices, and a lack of transparency in the bidding process, all of which disadvantage U.S. companies bidding on government tenders".
On repatriation of profits, it says U.S. and other international investors have raised concerns that the procedures and requirements for outbound transfers from Bangladesh remain cumbersome, lack transparency, and include significant delays for applications to repatriate profits, dividends, and other capital, with some companies waiting over a year for approvals.
"U.S. companies report that agency-level regulators continue to present significant obstacles to securing required approvals for remittances in a timely manner, which are required before companies can seek central bank clearance".
Government procurement is primarily undertaken through public tenders under the Public Procurement Act of 2006 and conducted by the Central Procurement Technical Unit. "Bangladesh publicly subscribes to principles of international competitive bidding; however, charges of corruption are very common."
Bangladesh launched a national electronic government procurement portal, but U.S. stakeholders have raised concerns about the use of outdated technical specifications, the structuring of specifications "to favor preferred bidders", and a lack of overall transparency in public tenders.
The USTR report says that the Information and Communication Technology Act 2006, amended in 2013, authorises the Government of Bangladesh to access any computer system for the purpose of obtaining any information or data, and to intercept information transmitted through any computer resource.
Under this law, Bangladesh may also prohibit the transmission of any data or voice call and censor online communications.
"The Bangladesh Telecommunications Regulatory Commission (BTRC) ordered mobile operators to limit data transmissions for political reasons on several occasions in 2019, 2020, and 2023 ahead of politically sensitive events, including local and national-level elections".
The BTRC ordered mobile operators to block all services in the Rohingya refugee camps in Cox's Bazar, except for voice calls, from September 2019 until August 2020, the report reads.
Bangladesh is neither a Party to the WTO Agreement on Government Procurement nor an observer to the WTO Committee on Government Procurement, it mentions.
The US trade wing notes that Bangladesh has taken some steps in recent years to improve intellectual property (IP) protection through legislative reforms, adding that the effectiveness of these changes remains uncertain.
"U.S. stakeholders have reported potential IP violations in various industries, such as fast-moving consumer goods, apparel, pharmaceutical, and software industries. Stakeholders also report a growing trend of Bangladesh serving as a source country for counterfeits distributed globally".
It says: "The lack of investigative expertise of the police and reluctance to initiate independent investigations further exacerbate IP right holders' ability to enforce their rights".
"In addition, IP right-holders have raised concerns about the courts' ability to adjudicate fairly IP cases." the report notes.
It mentions that Bangladesh has undertaken several legislative reforms related to IP, including the passing of a new patent law in April 2022, copyright amendments in October 2023, and the enactment of the Industrial Design Act in July 2023.
"To strengthen Bangladesh's IP regime, better coordination among enforcement authorities and other government institutions is crucial," it is stated. They are customs, the Office of the Attorney-General, the Copyright Office, the Bangladesh Investment Development Authority, and the Department of Patents, Designs, and Trademarks.
The country has never submitted a subsidies notification to the WTO Committee on subsidies and countervailing measures despite the fact that it provides subsidies in many sectors, including agriculture and export earners, it points out.
In 2013, the United States suspended all of Bangladesh's tariff benefits under the Generalized System of Preferences (GSP) programme on grounds Bangladesh's failure to meet statutory eligibility requirements related to worker rights, particularly with regard to acceptable conditions of work in the ready-made garment sector, including fire and building safety, and freedom of association.
As of December 2023, Bangladesh remained ineligible for duty-free treatment under GSP.
Asked about the USTR report, Commerce Secretary Tapan Kanti Ghosh told the FE that Bangladesh had basically been working for reform on trade, investment and other issues over the last 2-3 decades.
"We are gradually conducting reform in our sectors to restrain obstacles on way to local and foreign trade and investments. It will take some time to upgrade the business environment like in the US or Europe. But we are hopeful of bringing upgraded and simplified business system within next few years in Bangladesh," he added.
He, however, mentioned government moves in right earnest. "Nevertheless, we may sit with USA on the TICFA issue on April 21 where those issues will hopefully be discussed and we will try to go for necessary further reforms there," Mr Ghosh said.
"As one of the biggest trading partners, we always welcome USA for any cooperation and technical support regarding the trade, investment and other issue in Bangladesh," the Commerce Secretary added.
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