How beneficial TICFA deal will be for Bangladesh?

Bangladesh maintains good economic and political relations with the United States. As the single largest export destination, the US is a very important trade partner. On November 25 Bangladesh signed the much-talked-about Trade and Investment Cooperation Forum Agreement (TICFA) with US in Washington DC.
The trade deal was signed aiming to bolster bilateral trade and investment among the two countries. However, different views are there that through signing the deal Bangladesh has 'compromised' freedom in many aspects.
The US foreign direct investment (FDI) in Bangladesh was US$227 million in 2011, up by 15.2 per cent from 2010. On the other hand, Bangladesh's FDI in the United States was $4.0 million in 2011, up by 33 per cent from 2010. In 2012 Bangladesh exported goods worth $4.9 billion to the US while imported goods worth $502 million from there.
Bangladesh's commerce secretary Mahbub Ahmed and United States deputy Trade Representative Wendy Cutler signed the deal on behalf of their respective governments. The trade and investment agreement was signed after eleven years of negotiations which started in 2002.
Trade officials were of the opinion that TICFA can be considered as a platform for discussing bilateral trade and investment issues. They think that there was no formal forum to handle various issues and resolving the disputes arising from time to time. Through the TICFA body the two sides now will be able to easily address various concerns.
Some economists said the deal is not as harmful as the left-leaning political parties describe and oppose. They said the US has so far has signed such trade agreements with 92 countries and regional associations but none have experienced anything harmful so far. They also said there is no legal binding or anything to compel any country to do anything. So, there is nothing to wholesale opposition of the TICFA.
Trade officials said through the forum Bangladesh would be able to create pressure on US government for preferential market access of its apparel items and revival of the generalised system of preferences (GSP) facility which the US suspended last June citing poor working environment in the factories.
Bangladesh is the second largest producer of readymade garment (RMG) in the world. Nearly 80 per cent of foreign currency is earned for the country through exporting RMG. As a least developed country Bangladesh's 97 per cent export items enjoy duty free access to the US market but the readymade garment is not included in the list. So, the US buyers pay a good volume of money as duty while importing Bangladesh made RMG. As a result Bangladesh made apparel items lose competitiveness in the US market.
The US has offered duty free access facility to RMG of many countries and blocs which has facilitated them to earn a lot. For example the products of African nations enjoy duty free access in the US market under the African Growth and Opportunity Act which President Clinton signed in May 2000. Bangladesh's RMG will have to gain duty free access in the US market if it wants to remain competitive there.
Following fire incident in some garment factories and the collapse of Rana Plaza which killed nearly 1,134 workers Bangladesh is under tremendous pressure from major buyers - the US and the European Union-- to ensure workplace safety, labour rights, and allowing trade union etc. As TICFA signed, Bangladesh may further face pressure from the US in this connection. In the Forum meetings Bangladesh will face questions regarding labour rights and workplace safety as the US administration itself is under pressure from its nationals regarding RMG imports from Bangladesh.
Ensuring intellectual property rights (IPR) is a major concern of the US with whom it signed such trade deals. A clause of the deal says: "Recognising the importance of providing adequate and effective protection and enforcement of intellectual property rights and adherence to intellectual property rights norms in accordance with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, the Berne Convention on the Protection of Literary and Artistic Works, and any other intellectual property rights-related international agreements as applicable to the Parties."
The IPR is hardly followed in many sectors. For example, Bangladeshi computer users frequently use software from open sources. People involved with the deal said such scope will be narrowed down in the future once all the sections of the pact are enforced. It is very hard for people of poor countries like Bangladesh to purchase expensive software for use. The rate of using computer here has expanded rapidly when it became affordable to people. Now, using many software inline with the IPR may hinder further expansion of computer use.
Commerce minister GM Quader in a media briefing ruled out any possibility of US domination on Bangladesh's trade following the TICFA signing. He said there is no scope that the US will control Bangladesh's business because of signing the deal.  He said Bangladesh is an independent country. None can impose anything illegitimately.
He said Bangladesh will continue enjoying the facilities as it was enjoying as a member of the World Trade Organisation (WTO). The new pact would not hamper any other facilities the parties have been enjoying from other bilateral and multilateral platforms.
The major features of TICFA deal is as follows:  The two parties-
n Desiring to enhance the bonds of friendship and spirit of cooperation, to expand trade, and to strengthen economic relations between the Parties;
n Recognizing the importance of fostering an open and predictable environment for trade and investment;
n Recognizing the benefits the Parties can derive from increased trade and investment, and that trade-distorting investment measures and investment-constraining and protectionist trade measures can reduce these benefits;
n Recognizing that both Parties are signatories to the United Nations Convention Against Corruption, and the importance of promoting transparency and adhering to the Convention, particularly in matters related to trade and investment;
n Recognizing the essential role of private investment, both domestic and foreign, in furthering growth, creating jobs, expanding trade, improving technology, and enhancing economic development;
n Recognizing the increased importance of trade in services between their economies;
n Taking into account the desirability of reducing non-tariff trade barriers in order to facilitate increased trade among the Parties;
n Recognizing the importance of providing adequate and effective protection and enforcement of intellectual property rights and adherence to intellectual property rights norms in accordance with the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights, the Berne Convention on the Protection of Literary and Artistic Works, and any other intellectual property rights-related international agreements as applicable to the Parties;
n Recognizing the importance of improving the observance and promotion of workers' rights to both countries' economic welfare-, respecting, promoting and realizing in each Party's laws and practices the fundamental labour rights enumerated in the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-Up (1998); and ensuring the effective enforcement by the Parties of their respective labour laws;
n Recognizing the importance of protecting and preserving the environment in accordance with each Party's environmental laws, and desiring to ensure that trade and environmental policies are mutually supportive in the furtherance of sustainable development;
n Desiring to encourage and facilitate contacts between enterprises and other trade and investment related groups in each other's territories;
n Acknowledging the desirability of resolving trade and investment matters between them as expeditiously as possible;
n Desiring to reinforce the rules-based multilateral trading system embodied by the World Trade Organisation (WTO) by entering into mutually advantageous arrangements, in keeping with the WTO Agreements;
n Noting that the Parties are Members of the WTO and affirming that this Agreement is without prejudice to the rights and obligations of the Parties under the agreements, understandings, and other instruments related to or concluded under the auspices of the WTO;
n Noting the Treaty Between the United States of America and the People's Republic of Bangladesh Concerning the Reciprocal Encouragement and Protection of Investment (Bilateral Investment Treaty), signed on March 12, 1986, between the Parties and affirming that this Agreement is without prejudice to the rights and obligations of the Parties under the Bilateral Investment Treaty;
n Seeking to create a mechanism for further dialogue on initiatives for expanding their trade and investment through enhanced cooperation and more comprehensive agreements,
Whatever the conditions of the pact are, Bangladeshi negotiators will have to be skilled enough to deal with the issues with due expertise to reap benefit from it. Otherwise, as a poor country Bangladesh will continue to be a loser.
The writer is Senior Staff
Reporter of the FE