TICFA: Issues, realities and possible impacts

TICFA: Issues, realities and possible impacts

Md. Joynal Abdin

The Independent on December 27, 2013

Currently Bangladesh is passing through a period of political crisis. Ruling party has amended the Constitution after a verdict from the Supreme Court. Mass debate has ensued about the amendment and its impact on Bangladesh politics. The Opposition parties have shunned participating in the upcoming general election due to their assumption that the ruling party will abuse Prime Minister’s constitutional power to get the election result into their favour. Long lists of election engineering procedures are in discussion in favour of either party. The election commission of Bangladesh declared schedule for 10th parliamentary election without any discussion with any political party or give enough time for maturity of newly started dialogue between both the major parties.

The opposition alliance declared long strikes one after another to protest against the election schedule. A good number of general people including few political activists died in last few days due to this political unrest throughout the country. At the same time a large number of people injured or burned due to the same reason. In such an unstable situation the Bangladesh government singed the Trade and Investment Cooperation Framework Agreement (TICFA) with the USA on November 25th 2013. Mr. 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, political leaders including the leftist parties are giving their opinion and trying to relate the political climate with the signing of TICFA. Some critic states that the current government signed TICFA to achieve sympathy of the USA in favour of them. Arguments and counter-arguments are now available in the market in favour of and against it. Let’s try to understand the TICFA first.

There are 16 (sixteen) paragraphs at the preamble of the agreement beginning with the desire of enhancing the bondage of friendship between Bangladesh and USA with the spirit of cooperation in the field of expanding trade and strengthening economic relationship. In this age of glob­alization and free market economy countries are signing bilateral, regional even multilateral trade agreements including goods, services, free movement of people, trade, investment, services to share each party’s strengths with the counterpart for best utilization of possible opportunities. I do not found any harm for Bangladesh to desire strengthened economic tie with the USA as they are the largest destination of our export items and having potentials to be the largest investors here and relocating industries for mutual benefit.

Secondly the agreement recognizes 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 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. Technology transfer may also occur. Of course we have to be stringent and far-sighted before opening any industry having potential to harm our local industries.

In the fourth paragraph both the countries recall that they are the signatory countries to the UN convention against corruption particularly in case of trade and investment. None in Bangladesh will say that we are not corrupt. If this mechanism increases transparency and reduce corruption from the trade and investment climate of Bangladesh then it would be the same what we desire. Both the parties have recognized the truth about role of private sector investors local/foreign in case of economic growth, employment generation, increasing trade, improving technology finally fostering economic development of a country. Non-tariff barriers (NTBs) exist in both sides in the case of trade promotion.

In such case USA has more tariff and non-tariff barriers on Bangladeshi exports than that of the reverse side. Bangladeshi readymade garment exporters are facing a huge tariff barrier in the US market. So this paragraph may add tariff barriers with existing non-tariff barrier only. On the other hand, Bangladesh needs huge investment to remove existing NTBs like automation of customs procedures to ensure easy and transparent customs facilities, building infrastructure in seaports, increasing traffic capacities of the highways, construction of bridges and so on and so forth. If US investors come forward to invest on a mutual benefit basis then we shall welcome this. Protection of intellectual property rights (IPR), implementation of TRIPS agreement, Berne convention related to the artistic and IP matters are supposed to be implemented by the parties as applicable.That means Bangladesh do 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 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. At ninth paragraph, the agreement emphasizes on increasing observance and improving workers’ rights. Bangladesh has to be careful to deal with the issue mentioned in this paragraph, because Bangladesh has 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 future which is beyond our capacity.

Observance of labour rights is important but more important is to protect our existing industries and allow economy to grow further without too many compliance burden. In case of protecting environment for sustainable development Bangladesh has to be more conscious 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 environment pollution. We are suffering for their past pollution. So they shall compensate us to reinstall the environment and reduce pollution today. 

Both the parties committed to encouraging and increasing contact between the enterprises of respective countries. Bangladesh may ask for easing visa procedures and simplification of trade and investment related conflicts among both the parties are 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 USA, Technology transfer and Aid for Trade, etc.

Article one of the agreement states that, both the parties will work together to create and maintain an attractive business environment to diversify trade in goods and services. At the second article both the parties agreed to create a forum to meet at least once a year to discuss the issues further. Earlier both the parties recognized 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. Policy makers of both the countries may rethink to include private sector representative and think tanks here in this negotiation table 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, identify and remove barriers to trade and investment in both the countries. They are seeking private sector’s and civil society’s advice here but why not including in the core members of the forum. 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 prejudices.

Articles six and seven state the implementation procedures and exit policy for both the parties. Up to now I do not get any direct clause here in this agreement which one is directly harmful to our economy. But it provides us a platform where we may discuss trade and investment related disputes to consider by both the government as per respective law of the countries. 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 talk in the first meeting of the forum through intensive dialogue with the private sector to protect our stakes and explore potential benefit from each other.

Finally we have to be more conscious before committing anything with the USA and all aspect of the negotiation shall be transparent enough to avoid any misinterpretation from any group. No decision shall be agreed without enough discussion with relevant stakeholders of private sector.

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Md. Joynal Abdin

Development Researcher, Columnist and Author

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