Ticfa on the table
Considering the current world scenario, the US deserves the utmost importance to almost all countries of the world. Bangladesh is also not different from other countries.The importance of the US to Bangladesh is different for other reason -- the trade reasons -- because America is the single largest export destination for Bangladesh. More than 35% of garment items from Bangladesh go to the US.
Considering the country as an important trading partner, the US has been making pressure on Bangladesh over the years for signing an agreement between the two countries to make a platform for discussion.
The US has already signed Ticfa with more than 30 trading partners, including Pakistan, Sri Lanka, Afghanistan, Angola and a group of Central Asian nations and Asean.
Failing in its first step, currently, the US in its second effort redesigned the Trade and Investment Cooperation Framework Agreement (Ticfa) from its previous Trade and Investment Framework Agreement (TIFA) for holding dialogues.
Ticfa will offer a platform for Bangladesh and the US to discuss bilateral trade issues, including the trade barriers and opportunities and also investment in the two countries.
Four core factors -- security, protection of investment, intellectual property rights and standard of labour -- were the main obstacles in signing of the Ticfa.
According to different ministry sources firstly, Bangladesh opposed the Ticfa on all four core factors. But, after negotiation between the two countries both Bangladesh and the US finalised the draft agreement except the issue of labour standard. The US was demanding introduction of high labour standard in the factories. But, Bangladesh was not convinced in the US proposal.
Finally, the US agreed the ratification of the conditions of labour standard of Bangladesh and it was approved by the commerce ministry. After negotiation for years between the two countries, the commerce ministry of Bangladesh has already finalised the draft copy of Ticfa deal and the paper is now on the Prime Minister Sheikh Hasina's table. It is waiting for her approval, although many had thought that the agreement might be signed during the visit of US Secretary of State Hillary Rodham Clinton on May 5, 2012. But, the agreement was not signed although the issue of Ticfa was widely discussed during Clinton's visit.
Although the US has been saying Ticfa is a non-binding agreement that only commits parties to hold regular annual meetings. Many Bangladeshi stakeholders are still unaware of the matter. This is one of the major causes for not signing the agreement or cause of opposition by different quarters.
"Soon we hope to conclude a bilateral Ticfa, which will establish a forum that will identify and address obstacles for increased trade and investment between the two countries," said US Ambassador, Dan W. Mozena, at a discussion on US-Bangladesh Trade Relations at the FBCCI office in Dhaka on April 16.
The US wants the signing of the Ticfa because Washington wants more engagement with Dhaka in the area of security cooperation.
Experts said: the US believes that Bangladesh's role is vital in maintaining security in the Bay of Bengal. Besides, it considers Bangladesh as an active partner in regional counterterrorism efforts.
In trade perspective, the businessmen in Bangladesh are demanding duty-free facility of goods to the US from the country.
Currently, Bangladeshi garment exporters pay 15.30% duty for exporting to the US while China, the largest apparel exporting country worldwide pays only 3% to the US market.
Bangladesh's garment is now enjoying duty-free facility to the EU and two developed trade destinations in Japan. But, the US is still to give the facility although it should allow the facility to the least developed countries under the Doha Round of 2001.
In a heavily tilted in favour of Bangladesh, the bilateral trade between the two countries is growing at a substantial rate. In 2010-11 fiscal, Bangladesh exported goods worth $5.10billion while the import from the US was calculated $676 million during the same period.
97% of Bangladeshi goods have duty-free access to the US market, but the list does not include garment, the main export item of the country.
Of the export items, 90% include the garment products while the other items include frozen food, jute goods, agro-products, raw jute, leather, chemical products and tea.
Bangladesh imported mainly textile and textile articles, machineries and electrical equipments, base metals, live animals and cotton. Bangladesh had to pay nearly $650 million to the US for exporting the quantity.
The total amount of export of China to the US was calculated at $377.33 billion with duty at only 3%; Canada exported $274.77 billion with 0.9% percent duty; and Mexico exported $228.33 billion with a little more than 1% duty while Japan exported $129 billion with 1.6% duty.
Bangladeshi businessmen have been demanding duty-free entry of Bangladeshi garment items to the US. But, the US is not giving the facility. Many believe that the US is relating the duty-free facility with the Ticfa signing by Bangladesh.
The writer is a Journalist, The Daily Star.
The writer is a Journalist, The Daily Star.
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