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Out of the blue: Bangladesh-US trade talks

Imtiaz A. Hussain | March 16, 2018 00:00:00


March may be independence month for Bangladesh, stacked with positive vibes to the hilt, but that had little to do with our Commerce Minister high-fiving a trade agreement with the United States. His proposal at the March 01 US Trade Show in Dhaka's Pan-Pacific Sonargaon Hotel came out of the blue for a number of reasons, went against the general trade drift under President Donald J. Trump's tenure, and jumped to a trajectory so suddenly that Tofail Ahmed might be excused for any independence exuberance were it not for a strain of seriousness in his proposal.

That comment came out of the blue for at least three reasons. First, Bangladesh's track record thus far has only been registering 'regrets' for the continued US denial of its search for GSP (Generalised System of Preferences) and quota-free US trade privileges. One of the major reasons was tied to labour reforms, if not to streamline our practices to western standards, then at least to not institutionalised hazardous factory conditions for workers. The Obama Administration was gung-ho on this, but there is nothing similarly specific to hold the Trump Administration to as yet, thus leaving a window of opportunity the Commerce Minister is seizing.

The second reason is the near evaporation of the TICFA (Trade and Investment Cooperation Framework Agreement) discussions. One might recall how these were barely limping along, failing to open a free-trade pathway; and though little could be expected during the US presidential transition, there has been no mention of it, nor of any reorientation given that transition, recently.

Both of the above point to a third reason for this curious moment: our Commerce Minister has never pitched himself so optimistically about US trade relations in recent memory. Every GSP denial or TICFA bottleneck was typically followed by suggestions of seeking non-US alternatives, such as trading outlets elsewhere.

More salient behind the US presidential transition could be attempts to unwittingly change the ball game by each side to each side's advantage, even if that means holding hands with the devil to get the desired outcome. For Bangladesh, that might mean to renew its free trade agreement (FTA) bid rather than return to easing the GSP and TICFA sticky points. Likewise for the United States, since Bangladesh was not on Trump's electoral radar in the way China, the European Union, and Mexico were, any deal with Bangladesh when nothing satisfactory seems possible in Beijing, Brussels, and Mexico City, might be better than nothing at all. Like two bedfellows out of adversity, Bangladesh and the United States may find in FTA negotiations the Paretal outcome that eluded them for so long.

If this is his lucky break, it may be working both ways. Trump's main trade thrusts just happen to be against some heavyweight countries snatching US competitiveness: he has not bothered to change many of Obama's ambassadors, presumably because they are not in countries of US importance. In turn, this might be opening space for prevalent US diplomats to forge as many deals as they can, perhaps in the background of the major trade developments, like slapping tariffs against competing countries.

Behind this windfall opportunity, one cannot help but notice how even FTA thinking is permeating his protectionist mindset. True, low-wage ready-made garments (RMG) imports from Bangladesh would not be threatening jobs in South Carolina, and could lead to a stray case of upbeat bilateral relations that the Trump Administration seems to be finding with only autocratic countries, like Egypt, the Philippines, Russia, Saudi Arabia, Turkey, and so forth. Nevertheless, they also acknowledge Bangladesh's economic prowess in registering consistently high growth-rates, offering itself as a Muslim country capable of bucking the Islamic trend in two ways: promising what the United States has sporadically championed, democracy; and doing so as a Muslim country at a time when more people worldwide cannot conceive of Muslims being democratic enough, genetically or spiritually, because of more terrorism springing from Islamic ranks consistently than elsewhere, or the forbidding Muslim dress code, clipping more than personal freedoms.

When all is said and done, Tofail's astronomical leap from 'framework' discussions to 'free-trade' negotiations may be a pragmatic step. On the one hand, it is being gestured at a time when free trade is itself taking a blow globally, so much so that negotiations in its pursuit have been playing second fiddle to just the opposite kind of negotiations, to break past patterns, as for example, with both the European Union against Great Britain in the famous Brexit case, and the North American Free Trade Agreement partners, Canada and Mexico, against the United States.

On the other, it exposes Bangladesh with a resilient and upward-bound economy and a United States still scrambling to add some punitive advantages on its trade scorecard. It would be a low-cost deal for the United States, but a windfall for Bangladesh which is registering its economic growth records without amply exploiting the US market, especially in the RMG sector.

Tofail's smile is welcoming, particularly if it outlasts March and culminates in that out-of-the-blue FTA proposal. When the world's commercial attention is elsewhere and Trump has already rocked the trade boat, a minor, ostensibly ad-hoc FTA deal might open windows in an age dominated by closures.

Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.

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