TICFA: Issues, realities and possible impacts

TICFA: Issues, realities and possible impacts

Md. Joynal Abdin

The Daily Sun on November 30, 2013

Bangladesh government singed the Trade and Investment Cooperation Framework Agreement (TICFA) with the USA on November 25, 2013. Mahbub Ahmed, Commerce Secretary to the government of Bangladesh and Wendy Cutler, Acting Deputy US Trade Representative, signed the agreement on behalf of both the countries. Experts and political leaders are giving their opinion and trying to relate the political climate to the signing of TICFA. Let’s try to understand the TICFA.

There are 16 paragraphs at the preamble of the agreement beginning with the desire for the enhancement of the friendship bondage between Bangladesh and the USA with spirit of cooperation in the field of expanding trade and strengthening economic relationship. In this age of globalisation and free market economy countries are signing bilateral, regional even multilateral trade agreements for cooperation for the best utilisation of possible opportunities. I do not found any harm in Bangladesh strengthening economic ties with the USA as they are the largest destination of our export items and can be a leading investor here.

Secondly, the agreement recognises the need for strengthening existing and predictable business environment in case of trade and investment. Every country has its own policy to protect its domestic industries and open up the industries beyond its own capacity. If Bangladesh and the USA work together to improve trade and investment climate between the countries, in such case Bangladesh has nothing to lose but an opportunity may be created to gain technical, managerial and technological knowhow and technology transfer may be occurred. Of course we have to be farsighted before opening any industry having potential to harm our local industries. the fourth paragraph both the countries recalled that they are the signatory countries to the UN convention against corruption, particularly in case of trade and investment. There is no denying that corruption is prevalent in Bangladesh. If this mechanism increases transparency and reduce corruption from the trade and investment climate of Bangladesh, then it would be better for us.

Both the parties have recognises the truth about role of private sector investors, local or foreign, in case of economic growth, employment generation, increasing trade, improving technology finally fostering economic development of a country.

There are non-tariff barriers (NTBs) between the countries in terms of trade promotion. In such case the USA has more tariff and non-tariff barriers to Bangladeshi exports. So this paragraph may add tariff barriers with the existing non-tariff barrier only. On the other hand Bangladesh needs huge investment in automation of custom procedures to ensure easy and transparent customs facilities, building infrastructure in sea ports, increasing traffic capacities of highways, construction of bridges etc. If US investors come forward to invest on a mutual benefit basis, then we should welcome this.

Protection of intellectual property rights (IPR), implementation of TRIPS agreement, Berne convention related to the artistic works, and IP matters are supposed to be implemented by the parties as applicable to the parties. That means Bangladesh does not have to comply with any issues which are being exempted by the WTO agreements or any other international convention. Bangladesh will enjoy all exemption of LDC and the USA will protect Bangladesh’s IPR as it is doing now. So officially we do not have any burden in this paragraph beyond WTO or WTO plus. Unofficially we have to be careful in future about committing anything WTO plus (WTO +) in this regard.

In the ninth paragraph the agreement puts emphasis on increasing observance and improving workers’ rights but respective parties will honour each party’s existing law related to the labour issues. Bangladesh has to be careful to deal with the issue mentioned in this paragraph because Bangladesh has a long way to go in this regard. But ability of our entrepreneurs and capacity of relevant government agencies have to be considered in this regard. We shall not commit anything under this section in the future which is beyond our own capacity. Observance of labour rights is important but what is more important is to protect our existing industries and allow economy to grow further.

In case of protecting environment for sustainable development, Bangladesh will have to make them understand that we are not environment polluters but sufferers of this game. The developed world, including the USA, is responsible at large for the environmental pollution. So they should compensate us for the adverse impacts of climate change mainly caused by them.

Both the parties have committed to encouraging and increasing contact between the enterprises of the respective countries. Bangladesh may ask for easing visa procedures and simplification of trade and investment related problems among the both parties as per this agreement. Bangladesh has to be more conscious to negotiate any WTO plus agreement with USA in case of our obligation. We may negotiate with the issues related to duty-free and quota-free market access (DFQFMA) facilities from the USA, technology transfer and aid for trade etc.

Article one of the agreement states that both parties will work together to create and maintain an attractive business environment to diversify trade in goods and services. In the second article both parties agreed to create a forum to meet at least once a year to discuss with the issues further. Here the forum should include private sector representatives side by side government officials. Earlier both parties recognised the contribution of private sector investors in case of economic growth, employment generation and economic development but the same agreement ignores private sectors participation in the negotiation table. Policymakers of both countries may rethink to include private sector representative to make it more effective and practical.

Article three of the agreement limits the scope of work of the forum. It is clearly stated that the forum will look after current trade and investment trend and identify potential areas for expansion. They are seeking private sector’s and civil society’s advice here.

A dispute settlement mechanism is offering here at the article four of the agreement. Article five provides honour to the right of either party to offer more cooperation to any other party without any prejudges. Article six and seven states about the implementation procedures and exit policy for both the parties.

I do not get any direct clause here in this agreement which is directly harmful to our economy. It provides us a platform where we may discuss trade and investment related disputes. We are going to get a forum to identify barriers to the trade and investment and recommend respective authorities to remove those. Now we shall take necessary preparation to identify issues to discuss in the first meeting of the forum through intensive dialogue with the private sector to protect our stakes and explore potential benefits from each other. Finally all aspects of the negotiation should be transparent enough to avoid any misinterpretation. No decision should be taken without thorough discussion with relevant stakeholders.

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Md. Joynal Abdin

Development Researcher, Columnist and Author

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