TICFA, at last: Keeping our fingers crossed

Ending all speculation and not a little uncertainty Trade and Investment Co-operation Framework Agreement (TICFA) will be signed in Washington DC today (November 24). With plodding progress the Agreement has been long in the negotiation stage. Having initiated America was eager and ready to ink the deal from the very beginning. It knew very well what should be in the Agreement and how it would be implemented. For Bangladesh, it was new and as such prompted reservations on many points and the need for clarifications. As it happens in such cases, the status and influence of America made Bangladesh wary about agreeing on sensitive matters of trade and investment. Critics highlighting the risks of entering into an agreement over a broad range of economic issues may have made the Bangladeshi negotiators' task all the more onerous and tricky. Only after implementation starts it will be possible to say whether critics' apprehensions have been properly addressed by the Bangladeshi negotiators.
The proposal for a trade and investment agreement was broached by America in 2001 when it was given the name 'Trade and Investment Framework Agreement' (TIFA). In the first draft of TIFA there were 13 articles and 9 paragraphs. In 2005, the draft agreement was revised, keeping 7 articles and having 19 paragraphs. The condition of cancellation investment on grounds of allegation over corruption was added at America's behest. Organisations like Action Aid pointed out that after signing the Agreement America would exert political pressure to press its demands and advised Bangladesh to be circumspect. Negotiation over the agreement was slowed down because of change of government in 2006. It was resumed in 2009 after a political government came to power. During all this time America kept up the pressure for signing of the agreement. By that time TIFA was renamed as TICFA (Trade and Investment Co-operation Framework Agreement).
In the final Framework Agreement there are 7 Articles and 16 Paragraphs. The Articles cover the following:
1) Promotion of congenial environment for attracting investment in both countries and expanding trade in commodities and services.
2) Setting up a Forum under the Agreement which would be chaired by the ministry of commerce, government of Bangladesh and the Office of the US Trade Representative by rotation.
3) Convening the meeting of the Forum at least once a year to discuss trade and investment matters. Examination of the trade and investment relation between the two countries and identification of opportunities to expand trade and investment. Examination of the obstacles to expanded trade and investment by the forum. Consultation of private sector and civil society and taking their advice by the Forum. Bringing all matters concerned with trade and investment within the purview of the Forum.
4) Bringing to each other's notice any matter relevant to trade and investment through formal communication. Taking immediate action by the Forum to consider the matter referred to it by either party. Giving time by the Forum to consider before taking any action by either party in cases where their interests are adversely affected.  
5) Safeguarding the sovereign rights, obligations and assets of either party from being compromised.
6) Either party having the right to opt out of the Agreement after giving legal notice.
In various paragraphs of the Agreement the purposes of the same have been stated. According to these it has been envisaged that:
a) Trade and economic co-operation between the two countries would be strengthened.
b) An improved environment would be promoted for expansion of trade and investment in the two countries.
c) Greater transparency would prevail in the two countries in pursuance of the UN Convention on Corruption.
d) Non-tarrif barriers to trade would be removed.
e) Labour laws of both the countries would be implemented independent of each other.
f) Each country would support and promote efforts of either countries for industrial and trade promotion with other countries.
Prima facie, the Articles and Paragraphs of the Agreement appears innocuous and even-handed. The problem is the economic status of Bangladesh and America are not the same and this asymmetry confers advantage to the party having superiority over the other. Even under the most equitable dispensation the economically superior power stands to gain more than the weaker counterpart from an agreement. When an agreement enhances the power of the stronger party to put pressure the arrangement can lead to iniquitous results. It is apprehended by many that America will use the provisions of the Agreement to put pressure on Bangladesh in a number of areas to protect and promote its own interests. Such pressure may be at the cost of Bangladesh's interests. Much, however, will depend on the negotiating skill of the officials representing Bangladesh.
ADVANTAGES AND DISADVANTAGES: The immediate advantage of Bangladesh will be to formally submit the case of restoration of GSP (Generalised System of Preferences) which has been put on hold by the US Administration following Rana Plaza tragedy. Citing the various steps taken to improve the working conditions of RMG (ready-made garment) workers and to raise their minimum wage Bangladesh government can use the Forum under TICFA to press its case for restoration of GSP and also to extend it to garment export. Similarly, government of Bangladesh can now formally pursue the case for quota-free exports of its garments to the American market. Another advantage for Bangladesh following TICFA will be to attract American investors to Bangladesh more convincingly.
The critics have pointed out that the disadvantages resulting from TICFA will be many and in very important areas of the economy. One such disadvantage will be the scope and power given under the Agreement to America to pursue intellectual property rights more vigorously than before. Bangladesh's pharmaceutical industry will have to pay for the patent of American drugs which are being manufactured now under generic name. Bangladesh pharmaceutical industry will also face stiff competition as the Bangladesh market is thrown open to US drug manufacturers as is required under the Agreement.
In agriculture many genetically modified seeds will be eligible to be exported to Bangladesh under TICFA threatening the seed industries in Bangladesh, not to speak of the risk to our environment. American cotton export facing non-tariff barrier so long will now have free passage to Bangladesh market.
With many patents of American industries awaiting approval of US Administration, the control over bio-diversity is likely to be taken away once the patents get through. Even for products made from indigenous sources Bangladesh may have to pay patent fees under the provision of TICFA. These and other problems that will arise in future have already given rise to criticism against TICFA. It is not known how these concerns will be address by Bangladesh authorities as they negotiate over the details of the Agreement.
It may be pointed out by some that the right to opt out of the Agreement is a safeguard which can be resorted to in case of exigency and so Bangladesh need not suffer any loss under compulsion. The reality is stark and it makes TICFA an integral part of the bilateral relation between Bangladesh and America. Bangladesh will hesitate to cancel the Agreement even when it hurts because of the implications for the bilateral relation. TICFA having become more or less permanent, Bangladesh can gain from it only through clever and skillful negotiation in each specific area. We have, therefore, to keep our fingers crossed.
[email protected]