Risk, uncertainty surround proposed Trade and Investment Framework Agreement (TIFA) with USA, say economists

Khawaza Main Uddin, NewAge, January 27, 2009

Dhaka will not get any additional opportunity to export more goods or send more manpower to the US if it signs the proposed draft of the Trade and Investment Framework Agreement (TIFA) with Washington, observed eminent economists.

Moreover, they pointed out that the proposed bilateral agreement itself could impose certain restrictions on Bangladesh that might hamper its business interests elsewhere unless the deal allows due flexibility in allowing it to freely negotiate in the international arena.

In view of the risks and uncertainties surrounding such an agreement between unequal partners, the economists suggested that the Awami League-led government, which has expressed willingness to resume TIFA talks with America, should hold public discussions on the draft of the agreement to ensure transparency and tap the knowledge of its experts and economists.

Apprehensions of getting a raw deal by joining the TIFA, and especially of probable political repercussions, are said to have in the past prompted the governments not to make any hurried deal with the world’s lone superpower, although the negotiations that began in 2003 were secretly continued.

If Dhaka is to reap the maximum benefit from the TIFA, it should take adequate national preparations for carrying out effective negotiations and exploiting opportunities without tumbling into any pitfall.

‘There was no scope, in the earlier draft, to increase the export of goods and send Bangladeshi manpower to America. Instead, the facilities and waivers that Bangladesh as a least developed country is entitled to from the US under the WTO rules may be lost if we sign TIFA in the proposed form,’ said Ananya Raihan, executive director of research organisation DNet.

Dhaka may gain in terms of raising the flow of US investment into Bangladesh’s service sectors, especially the energy sector, but it will put at risk the concessions it deserves under rules of the World Trade Organisation and other international forums in the areas of intellectual property, labour and environmental standards and also the pharmaceuticals industry, he added.

He also questioned the provision, as proposed by Washington, of addressing corruption and bribery under the framework agreement. ‘Many things related to the maximisation of national interests depend on how the government negotiates with the US. For example, 100 per cent market access to the US market can be the issue of bargaining in the bilateral forum,’ said Quazi Kholiquzzaman Ahmad, president of Bangladesh Economic Association.

He, however, welcomed the government’s admission in public that it would resume the talks on TIFA as the first step towards guaranteeing transparency in striking a deal.

The US offered 97 per cent market access for products from least developed countries such as Bangladesh during the Hong Kong ministerial meeting of the WTO in 2005, but the American authorities have managed to stop duty-free entry of Bangladesh’s exportable items under the coverage of three per cent restriction.

Mustafizur Rahman, executive director of the Centre for Policy Dialogue, recommends public debate on the draft of the agreement, and also addressing the concerns expressed earlier by Bangladeshi experts over the ‘possible pressure’ that might come from the joint council to be formed in line with the agreement.

‘We have to be careful about including any provision in the agreement that can adversely affect our domestic industries. We also have to consider the potential gains such as market access that Bangladesh can ensure through better negotiation,’ he said, adding that the government should also scrutinise the experience of countries like Pakistan, Saudi Arabia, Brunei and Afghanistan which signed TIFA deals with the US.

Zaid Bakht, research director of the Bangladesh Institute of Development Studies, recommends more focus on skilful negotiations for realising Bangladesh’s demands instead of refusing such an agreement.

‘It is natural for the weaker nation to have apprehensions in joining talks with a bigger one. We have to assert our position, maintain an independent attitude and thus gain the maximum benefit from the agreement,’ he said, and suggested that the government should make the draft of the TIFA public and seek opinions from all concerned.


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