US trade ties politically weighed, skilled negotiators needed

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FE Report
Economists and business leaders Thursday at a seminar said the US provides preferential treatment to other countries on political consideration, and the Bangladesh government should engage politically skilled persons as negotiators at US-Bangla trade talks.
"The United States provides market access facilities to other countries on political consideration, not for getting trade benefit," Centre for Policy Dialogue (CPD) chairman Professor Rehman Sobhan told a seminar.
The seminar titled US-Bangladesh Trade and Economic Cooperation was organised by the Metropolitan Chamber of Commerce and Industry (MCCI) in the city on Thursday.
"We have to understand the global reality that the developed countries are gradually losing their competitiveness in many products as the Asian economies are gaining the competitiveness," he said.
They want to limit the market access facilities for developing countries to protect their own industries, he added.
"The Western countries are moving away from multilateral trading system to bilateral platform to gain more benefits," Mr Sobhan said
Market access facilities to the US depend on many political factors including fight against terrorism, geopolitics and other issues, and people with sound political knowledge should be engaged in trade negotiations, he said.
"The US has free trade agreement with several countries and provides preferential market access to African and Caribbean nations and differential treatments create trade distortion," Mr Sobhan pointed out.
Bangladeshi products do not get any preferential treatment in US market, whereas others are getting it creating a market distortion, he added.
"The combined US FDI and aid in 2008 was less than $400 million, whereas Bangladesh exports generated $574 million duty for the US," he said.
"Actually we are the net provider and it should be taken into consideration," he added.
US ambassador to Bangladesh James F Moriarty said Bangladesh would not get any benefit even if his government withdraws 15 per cent duty imposed on apparel products.
"India, China, Indonesia and other major exporters of RMG products are subject to 15 per cent tax, and if it is withdrawn all of them will get the privilege," he said.
The 15 per cent duty is actually paid by US consumers as it is borne by the US importers, he added.
Refuting the statement, Tariff Commission chairman Dr Mozibur Rahman said, the export would increase if the tax is withdrawn.
"The duty is not paid by the US consumers as when a US importer imports from Bangladesh, he keeps the duty in consideration and accordingly negotiates price with his counterpart in Bangladesh," he explained.
Former foreign minister Anisul Islam Mahmud said export prices of European countries are higher as duty is not imposed on their products.
He said Bangladesh does not need aid, but it needs market access to do business fairly but the US uses the access as 'political tools'.
"Bangladesh's export to Europe has increased as the continent provides GSP facilities to all least developed countries," he said.
Commerce minister M Faruk Khan said preferential treatment can be obtained through three ways.
The facilities can be settled at the multilateral trade platform of the World Trade Organistaion (WTO) and the second option is to convince the US Congress to pass a law to provide market access to Bangladesh, he said.
"The third option is to engage in negotiation with the US government bypassing the Congress and Senate to get the facilities," he added.
"Some Congressmen are supporting our initiative to get the facility, but at the same time there are many who are opposing it," he added.
The government is actively considering the US proposal on an alternative to TIFA in order to set up a trade and economic cooperation forum, Mr Faruk said.
"Switzerland and Iceland have similar cooperation forums with the US and we are scrutinising the agreements," he said.
"We want to have good relations with the US, but on the basis of mutual respect," he added.
Former commerce minister Amir Khasru Mahmud Chowdhury said Bangladesh is a very resilient country and finance for the major part of its development has come from the domestic sources, not from foreign aid.
The country should adopt selected liberalisation policy and find out which products should be allowed to enter the country and which not, he added.
Chairman of Policy Research Institute Dr Zaidi Sattar in his presentation said the government should formulate an import policy, which will encourage more exports.
"The present import regime is like a mountain barrier to have a sustained export success," he said.
The country also needs to develop backward linkage industries to avail GSP facilities, he said.
Former ambassador M Humayun Kabir in his presentation said policy coordination and result-based decision making process are needed to have a successful negotiation with the US.
"Blending business with diplomacy and nation-branding is important for successful negotiation," he said.