Bangladesh faces dilemma over new TIFA draft
Saturday, 29 August 2009
Nazmul Ahsan
The ministry of commerce is in a dilemma over initiating fresh talks with Washington on the Trade and Investment Framework Agreement (TIFA), keeping some controversial clauses of the draft agreement unchanged.
The US has recently insisted Dhaka on signing the deal.
The US authorities scrapped the draft of the TIFA in late 2008 that had taken a shape following lengthy negotiations in a span of two years between Dhaka and Washington, commerce ministry officials said.
Instead of sticking to old draft, the United States Trade Representative's office sent a new draft to the commerce ministry with the inclusion of a number of disputed clauses, some of which had originally been a part of the original draft of 2003. Those clauses were dropped during the final negotiation at the insistence of Dhaka, sources said.
The US Ambassador in Dhaka last week expressed his government's desire to sign the proposed agreement between the two countries during a meeting with Commerce Minister Faruk Khan.
"We alone cannot give the decision on initiating fresh talks on TIFA with the US government as the draft is a new one,'' commerce secretary Firoz Ahmed told the FE on Friday.
"We would seek opinion from the Prime Minister Sheikh Hasina or from the Cabinet prior to inviting our counterparts to finalise the next course of action relating to the TIFA," he added.
Meanwhile, a number of top officials in the commerce ministry said they are actually in a dilemma over taking decision on signing the deal with the US as the new agreement has a number of disputed clauses, which might go against the interest of the country.
"TIFA agreement, if signed keeping those new clauses intact, might prove harmful to the country, particularly on its export front,'' a high official, preferring anonymity, told the FE.
Explaining his concerns, he said the US authorities have incorporated issues of protection of intellectual property rights, workers rights and environment concerns into the fresh draft, which might jeopardize Dhaka's interest if the agreement is struck.
The priorities Washington incorporated into the new TIFA draft were not there in the draft earlier negotiated and put into a final form at the third-round negotiation between Dhaka and Washington in February 2005, he said.
The clause relating to the formation of a joint working group under the proposed US-Bangladesh Council on Trade and Investment has been dropped from the new draft which would also undermine Dhaka's interest in eliminating non-tariff barriers.
The new draft sent by the US authorities to the Bangladesh commerce ministry for consideration includes clauses on labour, intellectual property rights and environment issues which on agreement of both the parties were removed from the final draft negotiated in 2005, sources in the commerce ministry said.
The fresh proposal undermines the urgency of Bangladesh's interest in eliminating non-tariff barriers, often faced by Bangladeshi exporters to the US market in the name of labour standards, working conditions, wages and labour rights, sources said.
Trade experts said the incorporation of labour issues into the draft would enable the United States to impose sanctions on Bangladeshi exports to its market. They referred to Bangladesh's ongoing dilemma over how to allow trade unionism in the export processing zones.
A trade diplomat said the Trade-Related Aspects of Intellectual Property Rights (TRIP) Agreement under the World Trade Organisation was not favourable at all for least developed countries.
'If the TRIPS issue is incorporated into the bilateral TIFA, it will only favour the United States interests and it might create serious problems for Bangladesh in future,' a trade expert told the FE.
The new draft has proposed the inclusion of representatives of both the private sector and civil society in the US-Bangladesh Council on Trade and Investment. The earlier draft had proposed inclusion of the private sector representatives.
Issues such as elimination of corruption and bribery have also been included in the new draft.
However, the law ministry vetted the two contentious words, sources said.
The United States is the single largest export destination of Bangladesh with an annual export earning of about $4.0 billion or about 40 per cent of the Bangladesh's total annual export.
The last and third round negotiation on TIFA was held in Dhaka in February 2005, preceded by two other rounds in March 2004 and August 2003.
Betsey Stillman, a senior US trade policy adviser for Asia and Pacific, concluded the third and final round of negotiation, where both the parties agreed to replace 'bribery and corruption' with a softer term, 'prevention of malpractice', sources said.
The United States has concluded TIFA with a number of countries to enhance trade and economic ties with global partners.
On June 1 this year, US trade representative Robert B Zoellick signed a TIFA deal with five Central Asian countries - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan - promising them better trade and investment facilities.
The ministry of commerce is in a dilemma over initiating fresh talks with Washington on the Trade and Investment Framework Agreement (TIFA), keeping some controversial clauses of the draft agreement unchanged.
The US has recently insisted Dhaka on signing the deal.
The US authorities scrapped the draft of the TIFA in late 2008 that had taken a shape following lengthy negotiations in a span of two years between Dhaka and Washington, commerce ministry officials said.
Instead of sticking to old draft, the United States Trade Representative's office sent a new draft to the commerce ministry with the inclusion of a number of disputed clauses, some of which had originally been a part of the original draft of 2003. Those clauses were dropped during the final negotiation at the insistence of Dhaka, sources said.
The US Ambassador in Dhaka last week expressed his government's desire to sign the proposed agreement between the two countries during a meeting with Commerce Minister Faruk Khan.
"We alone cannot give the decision on initiating fresh talks on TIFA with the US government as the draft is a new one,'' commerce secretary Firoz Ahmed told the FE on Friday.
"We would seek opinion from the Prime Minister Sheikh Hasina or from the Cabinet prior to inviting our counterparts to finalise the next course of action relating to the TIFA," he added.
Meanwhile, a number of top officials in the commerce ministry said they are actually in a dilemma over taking decision on signing the deal with the US as the new agreement has a number of disputed clauses, which might go against the interest of the country.
"TIFA agreement, if signed keeping those new clauses intact, might prove harmful to the country, particularly on its export front,'' a high official, preferring anonymity, told the FE.
Explaining his concerns, he said the US authorities have incorporated issues of protection of intellectual property rights, workers rights and environment concerns into the fresh draft, which might jeopardize Dhaka's interest if the agreement is struck.
The priorities Washington incorporated into the new TIFA draft were not there in the draft earlier negotiated and put into a final form at the third-round negotiation between Dhaka and Washington in February 2005, he said.
The clause relating to the formation of a joint working group under the proposed US-Bangladesh Council on Trade and Investment has been dropped from the new draft which would also undermine Dhaka's interest in eliminating non-tariff barriers.
The new draft sent by the US authorities to the Bangladesh commerce ministry for consideration includes clauses on labour, intellectual property rights and environment issues which on agreement of both the parties were removed from the final draft negotiated in 2005, sources in the commerce ministry said.
The fresh proposal undermines the urgency of Bangladesh's interest in eliminating non-tariff barriers, often faced by Bangladeshi exporters to the US market in the name of labour standards, working conditions, wages and labour rights, sources said.
Trade experts said the incorporation of labour issues into the draft would enable the United States to impose sanctions on Bangladeshi exports to its market. They referred to Bangladesh's ongoing dilemma over how to allow trade unionism in the export processing zones.
A trade diplomat said the Trade-Related Aspects of Intellectual Property Rights (TRIP) Agreement under the World Trade Organisation was not favourable at all for least developed countries.
'If the TRIPS issue is incorporated into the bilateral TIFA, it will only favour the United States interests and it might create serious problems for Bangladesh in future,' a trade expert told the FE.
The new draft has proposed the inclusion of representatives of both the private sector and civil society in the US-Bangladesh Council on Trade and Investment. The earlier draft had proposed inclusion of the private sector representatives.
Issues such as elimination of corruption and bribery have also been included in the new draft.
However, the law ministry vetted the two contentious words, sources said.
The United States is the single largest export destination of Bangladesh with an annual export earning of about $4.0 billion or about 40 per cent of the Bangladesh's total annual export.
The last and third round negotiation on TIFA was held in Dhaka in February 2005, preceded by two other rounds in March 2004 and August 2003.
Betsey Stillman, a senior US trade policy adviser for Asia and Pacific, concluded the third and final round of negotiation, where both the parties agreed to replace 'bribery and corruption' with a softer term, 'prevention of malpractice', sources said.
The United States has concluded TIFA with a number of countries to enhance trade and economic ties with global partners.
On June 1 this year, US trade representative Robert B Zoellick signed a TIFA deal with five Central Asian countries - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan - promising them better trade and investment facilities.