Bangladesh signs Ticfa

Bangladesh entered into the much-talked about Trade and Investment Co-operation Forum Agreement (Ticfa) with the US on Monday after more than a decade of wrangling, floating a forum for bilateral talks on labour and trade issues.

The signing in Washington has raised chances of Bangladesh getting back the suspended GSP privilege and also the duty-free market access of its main export item readymade clothes to the US.

But it will also allow the US to pursue intellectual property rights issue more vigorously than before, putting the thriving pharmaceutical industry into stiff competition, for instance, as it will have to pay for the patent of the American drugs which are now being manufactured under generic name.

US Ambassador in Dhaka Dan Mozena, however, said it was ‘a very simple’ agreement. “The text will be published today or tomorrow. It does one thing: establishes that forum”.

More than 50 countries have signed Ticfa with the US, he said.

With the treaty signed, American investments in Bangladesh and the export of Bangladeshi products in the US market will be doubled in quantity, according to the US side.

Leftist groups have claimed if copyright law is implemented, it will turn into an economic and political tool for large companies in the US. The treaty will allow these companies to make unlimited profits.

The Ministry of Foreign Affairs, however, termed the signing ‘historic’. The opposition BNP welcomed it as ‘positive’.

The foreign ministry’s spokesperson Md Shameem Ahsan told bdnews24.com that Acting Deputy US Trade Representative Wendy Cutler and Bangladesh’s Secretary of Commerce Mahbub Ahmed put pen to paper after a short meeting, the first of the bilateral forum.

According to the foreign ministry, the agreement is aimed at fostering bilateral trade and investment for creating jobs, improving technology and enhancing development.

“It recognises the importance of promoting the observance of other issues such as intellectual property right, environment, workers rights in accordance with laws of each country and in line with the international agreements as applicable to the countries”.

The US Trade Representative Ambassador Michael Froman during the signing said Ticfa would now provide “a formal mechanism for Bangladesh and USA to engage in regular discussion on trade and labour issues”.

For instance, Froman said, “the issues like GSP action plan (can) enable the countries to work together for improving labour condition and workers' rights in Bangladesh”.

Bangladesh Ambassador in Washington Akramul Qader said this was “the opening of a new chapter” in the US-Bangladesh bilateral relationships.

“This will pave way for stronger engagement between the parties to resolve some crucial trade issues like GSP restoration and duty-free, quota-free access of Bangladesh's exportable to US market”.

Commerce Secretary Mahbub Ahmed expressed his hope that “the relationship of friendship and mutual respect will get a new stimulus and significant boost” with the signing.

The foreign ministry says the forum will facilitate enhanced market access for Bangladesh to the USA and further US investment in Bangladesh.

The US is the single-biggest export destination of Bangladeshi products from where about 30 percent of the total export earnings come.

But the main export item, readymade clothes do not enjoy the zero-duty facilities and have to pay 16 to 32 percent duty.

Bangladesh was demanding for duty-free market access for its cloths.

But Ambassador Mozena on different occasions said the issue would be discussed only in the platform that the TICFA would create.

In the first meeting after the signing on Monday, according to the Ministry of Commerce, they kept GSP and the readymade clothes duty-free market access issues on the agenda.

America first broached the idea for a trade and investment agreement in 2001 with the name ‘Trade and Investment Framework Agreement (TIFA)’.

Negotiations slowed down due to changing of the political government in 2006. They resumed in 2009 after the Awami League came to power.

By that time TIFA was renamed as TICFA.

Bangladesh has always been in fear that the agreement will force it to sit to talk on issues that the country may not like to discuss and the US may exert political pressure to press its demands.

The cabinet on June 17 this year cleared it after the worst-ever building collapse that killed more than 1100 people and the US suspended the GSP privilege that some products enjoyed for its market access.

Bangladesh became pro-active as the GSP suspension had been seen as ‘sending bad image’ of the country to other markets.

Frequent incidents of factory fire also made it easy for the US to press Bangladesh for the agreement under which the labour issues will also be discussed.

However, the agreement keeps a provision for both parties to opt out following a procedure.