Minister sees links between TICFA delay and GSP shock
Commerce Minister GM Quader yesterday said Bangladesh's delay in signing the TICFA might be related to the US bid to scrap the generalised system of preferences (GSP).
â€œThe recent US move on the GSP might have indirectly been linked to the TICFA [Trade and Investment Cooperation Framework Agreement],â€ said Quader.
The minister also suggested Bangladesh should immediately ink the agreement.
The commerce minister added: â€œThe TICFA has now become a necessity and the government is seriously considering it.â€
Quader's comments came at the inauguration ceremony for GAPEXPO-2013, a four-day exhibition on garments accessories, packaging and related machinery, being held at Bangabandhu International Conference Centre.
Although the GSP covers less than 1 percent of Bangladesh's total exports to the US, the country's image will be tarnished if GSP is scrapped, said Quader.
The other countries, where Bangladesh enjoys duty-free benefits under the GSP scheme, might be influenced, too, by the US decision, he added.
The European Union, which is now offering duty waiver to all Bangladeshi products, is also closely observing the GSP issue, according to Quader.
â€œIt will have an adverse impact on the country's exports if they [EU] also scrap the duty-waiver benefit for Bangladeshi products,â€ he said.
So the government is seriously working to resolve the issue by preparing a 'position paper' to be presented at the next hearing of the United States Trade Representative (USTR) in March, said Quader.
The commerce minister said Bangladesh exports nearly $5 billion worth of goods and services to the US a year, and Bangladesh saves around $230 million due to the GSP benefit.
Quader said the key bottleneck to the TICFA is the labour rights issue.
The US wants immediate elimination of child and forced labour from all sectors and permission for trade unionism at factories, but Bangladesh wants to implement them in phases, he said.
Bangladesh is now following the labour standards of both International Labour Organisation (ILO) and its own labour laws, and is currently in the process of implementing ILO's 'better work programme' at the factory level.
Meanwhile, Bangladesh's garment sector has been declared free from child labour by the US Department of Labour.
The TICFA is a proposed platform for Bangladesh and the US to discuss bilateral trade issues, including trade barriers and opportunities in the two countries.
Four core factors -- security, protection of investment, intellectual property rights and labour rights -- have been widely discussed in the negotiations.
Ahead of the US Secretary General Hillary Clinton's visit to Bangladesh in May last year, the Bangladesh government finalised a draft of the TICFA.
Although many issues were discussed, the draft was not signed during the visit.
The TICFA is now on Prime Minister Sheikh Hasina's table for her final approval.
Bangladesh, as a least developed country, enjoys duty-free access to the US market for 97 percent of its products -- but readymade garment items are not included in the scheme.
At present, Bangladeshi garment exporters have to pay 15.30 percent duty to enter the US market.