'Some reasons' behind delay
Trade and Investment Cooperation Forum Agreement (Ticfa) with the US will create a platform to settle trade disputes between the two countries, Commerce Minister GM Quader said yesterday.
“We are not signing it under pressure from anyone,” Quader said in an interview after the cabinet approved the draft of the agreement.
Ticfa arose from the need for a platform to discuss trade issues, said the minister.
Though Ticfa will not improve the country's chances of retaining the Generalised System of Preferences (GSP) from the US, it will open scope for negotiations to reinstate the trade benefits -- in case the United States Trade Representative discontinues the facility.
Formal negotiations for Ticfa began in 2002 in the name of Trade and Investment Framework Agreement (Tifa), but later it was re-branded as Ticfa to make it a binding accord for cooperation between the two countries. Unofficially, the issue has been in talks since 1992.
“In fact, Prime Minister Sheikh Hasina had agreed much earlier to sign Ticfa, but it was delayed for some reasons,” Quader said.
One of the reasons was lack of agreement between the two parties regarding workers' rights, he said.
“The US wanted immediate improvement of workers' rights and Bangladesh was saying it would be a gradual improvement. The problem was with the word gradual.”
On the home front, at least five ministries were directly involved in the deal, and only the foreign ministry objected to a rule on workers' rights. The agreement was left hanging in the balance for long, a top government official said.
The two countries are expected to sit together at least once a year to settle trade disputes, according to the terms of the agreement.
“Ticfa will help remove trade barriers and create the ground for increasing bilateral trade. And Bangladesh will be able to demand trade benefits from the US.”
He said the government should have made public the draft of the agreement much earlier. “Then there would not have been so much negativity about it”.
The US has signed similar agreements with 92 countries and regional associations and groups. Among the South Asian nations, only Bangladesh and Bhutan have been left out.
On enhancement of workers' rights, Quader said, “We should not be doing it under pressure from any country or for retention of GSP facilities -- it is our own responsibility to protect the interests of our workers.”
The minister said the US might expand GSP coverage in the future to include garments, the country's main export.
“The US government is now working to reform the GSP scheme. And with Ticfa in place, we can discuss the issue.”
Currently, 97 percent of the country's export items enjoy duty-free entry to the US, but readymade garment products that account for the bulk of exports have been left out.
Bangladeshi RMG exporters currently pay 15.3 percent duty. In 2011, the country paid $746 million as duty for exporting garment items worth nearly $5 billion to the US market.
In contrast, China, the largest apparel exporter, pays only 3 percent duty on garment exports to the US.
Of the total exports to the US from Bangladesh, 95 percent are garment products.
The country currently has a bilateral investment treaty with the US, signed in March 1986, and a partnership dialogue forum set up in September.
Apart from some regional agreements, Bangladesh has so far signed bilateral trade agreements with 42 countries, said the minister.
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