Government is going to sign TICFA agreement with USA, loss or gain ?

[BDforever]

The United States has been putting pressure on Bangladesh to accept the TICFA treaty; otherwise Bangladesh might lose the GSP (generalized system of preference) benefit in the US. Following this we have been informed by the Minister for Trade that Bangladesh will soon sign the TICFA. The US has threatened that it will withdraw the GSP benefit for Bangladesh if Bangladesh does not accept the TICFA. The President of BGMEA Safiul Islam Mahiuddin said a few days ago “Bangladesh does not get the GPS benefit that much anyway. We have to pay 750 million dollars in tax to the US government. Only 0.5 percent of Bangladeshi products enjoy the GSP. So it will not matter much if we don’t get this benefit.” According to the Doha Agenda adopted by the World Trade Organization Bangladesh automatically has a right as a developing nation to export products to a developed country without paying tax. This is not a special generosity of the US or the EU. Because of the free market imposed by the World Trade Organization, countries like Bangladesh have to open its market to multinational corporations who are now dominating the domestic market. The developed countries promised to grant us the GSP benefit because of this unfair and unbalanced situation.



According to the agreement 97 percent of Bangladeshi product should enter the US market tax-free. Bangladesh has a market of 4.8 billion US dollars in the US. Only 0.54 percent products get the benefit of tax-free trading. 0.54 percent covers export worth only 26 million dollars. This portion of export includes tobacco, ceramic, furniture, plastic, and toys. The main export of Bangladesh, readymade garment products, does not get the GSP benefit. Bangladeshi traders pay 15 percent tax for export to the US. In fact the US violates the World Trade Organization treaty by not giving Bangladesh GSP for garment products. On 28 July the US ambassador to Bangladesh Dan W Mozena urged Bangladesh to sign the TICFA treaty and said “Bangladeshi products will not get the tax-free benefit if the TICFA treaty is not accepted.” Commenting that the haggling over the TICFA is ‘discomfiting’ he said “what is wrong in it? I don’t see anything wrong.” The Minister for Trade said on 11 May “some people are making this TICFA treaty a big deal and getting scared. There is nothing to worry. It will only open the path for discussion about mutual trade.”The draft of the agreement mentions mutual trade and stronger relationship. But other parts of the draft propose opening up the market, and massive privatization. This is an unambiguous plan for US hegemony in Bangladeshi market; particularly the service based sector will go under the control of US multinational companies. Proposals 5 and 19 of the agreement state that both countries will adopt liberal policies for international trades and investments. Proposal 8 puts highest emphasis on the growth of private sector and section 3 provides that high officials from both countries will form a ‘trade and investment commission’ to advice on the strategies and policies for the private sector. Section 1 only mentions service sector but says nothing about producing ‘commodities’. So, according to the agreement the US only invest in the service sector and will not produce anything in this country.



According to the treaty Bangladesh will be obliged to remove all obstacles for the US multinational companies, including any obstacle relating to tax. Bangladesh must repeal all conservative laws that prioritize and give privilege to local industries and companies over foreign companies. The treaty will provide protection for the US investors and Bangladesh must allow them to operate in the fuel, gas, electricity, port, telecommunication, education, health, and transportation sectors among others. So, if this agreement is signed then the service sector will go totally under the control of US multinational companies and the government will have no power over it. The local companies will suffer. The foreign companies will increase the prices of services and products tremendously to make profit. The prices in telecommunication, electricity, gas, water, medical services, education, and port services will multiply. The poor and ordinary people will suffer the most.



Section 18 provides that Bangladesh will have to comply with the Doha Agenda and decrease the subsidies in the agricultural sector and adopt free market policies. By complying with the Doha Agenda Bangladesh currently cannot provide more than 5 percent subsidy in the agriculture sector whereas the US itself gives 19 percent subsidy for agriculture in its land. The US is adopting very conservative policies for its own but forcing developing countries like Bangladesh to adopt liberal policies. The US is saying that after signing the treaty US investments in this country will increase many fold and we will be able to export more. But the main problem in exporting to the US market is the tax. China is exporting to the US for far less tax (3 percent) than Bangladesh (15.3 percent) even though it did not sign the TICFA.



If this treaty is given effect then Bangladesh will have to implement the patent laws before 2016, which will threaten the agricultural, pharmaceutical, and computer software sectors among many others. The WTO patent agreement allows leniency for Bangladesh. Bangladesh can have this benefit of not having to comply with patent laws for services and commodities until 2013 and for the pharmaceutical sector this will be allowed until 2016. This time will most likely be extended.



But TICFA does not allow for this. So, Bangladeshi pharmaceutical and computer sector will be destroyed by having to pay patent, copyright, and license fees to the American companies. Price of everything will go up. Bangladesh will have to incur 50 billion taka loss just by paying for software licensing fees. The local pharmaceuticals will not be able to produce medicine. We will have to buy pharmaceutical products from foreign companies for a much higher price. The local pharmaceutical industry will be damaged. They will not be able to continue to compete with the foreign companies in an unfair competition.



Many small businesses will be destroyed. Implementing the patent laws will bring crisis for our agriculture and wildlife as well. Animals and plants in many countries including Bangladesh, India, and Brazil etc. are patented by multinational companies. If patent law is implemented in the agricultural sector then the farmers will not be allowed to produce, accumulate, preserve, and reproduce seeds. The patent law will make the multinational companies richer and devastate the people and the country. Because of the increased prices in agricultural products the country will likely face a food crisis.

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[BDforever]

The Ministry of Commerce has been dogged by two difficult issues during the recent past. One is the dilemma whether to sign the proposed Trade and Investment Cooperation Framework Agreement (TICFA) with the USA, and the other is how to prevent being excluded from the GSP scheme of the USA over labour standards. It seems the Ministry believes the solution to both these problems to be one and the same: if Bangladesh signs TICFA, the USA would go slow on the GSP issue. In other words, the USA has upped the ante in respect of GSP benefits in order to pressurise Bangladesh into signing TICFA. The Commerce Minister has said as much.

The proposal for a trade and investment framework agreement (TIFA) was first proposed by the USA about a decade ago. The then government shied away from such an agreement in view of some clauses relating to labour and environmental standards, intellectual property rights (IPR) obligations and governance issues (corruption). Because of the discomfort of Bangladesh government, the USA deleted the environmental standards and corruption issues from their subsequent drafts. It seems the government later overcame its concerns about IPR obligations, but it was adamantly opposed to any mention of labour standards.

The government has not made the contents of the latest draft of the proposed TICFA public. Hence, it is difficult to make any definitive comments about it. Some parts of it have been leaked to the media, but their veracity cannot be guaranteed. The sticking point still seems to be labour standards.

The USA has signed trade and investment framework agreements with a large number of the relatively small developing countries and economic blocs. None of the large emerging countries, Argentina, Brazil, China or India, have such agreements with the USA and the only developed countries to sign TIFA are Iceland, Switzerland and New Zealand. All these agreements are of a similar format with about one-half of the agreement devoted to a preamble and the other half to articles. The preamble is a statement of good intentions and objectives, while the articles contain what the parties actually agree to do.

The issues that Bangladesh have (or had) difficulties with are (were) contained in the preambles. Hence, they are in the nature of good intentions or of objectives that the contracting parties aspire to; they are not required to be immediately implemented. It is noteworthy that the labour rights issues are routinely included in virtually all TIFAS. For example, the preamble of the TIFA with Pakistan, Malaysia or Sri Lanka has the following regarding labour rights:
Photo: Reuters

Photo: Reuters

&#8220;Recognizing the importance of providing adequate and effective protection and enforcement of worker rights in accordance with each nation&#8217;s own labour laws and improving the observance of internationally recognized core labour standards&#8221;

This excerpt suggests that the contracting parties recognise the importance of respecting its own laws in regard to labour rights and of gradually moving toward international core labour standards, which are consensually set by the International Labour Organization.

Bangladesh government has never adequately explained why it finds this minimal commitment to adherence to its own labour laws and to ILO&#8217;s core labour standards (to which it is a signatory) so unacceptable. Unless there are some compelling reasons that are not publicly known, such a statement in the preamble of a trade and investment framework agreement should not constitute a sufficient reason to discard it.

On its part the USA has attempted to make the agreement more acceptable by renaming it TICFA. The new draft is for a cooperation agreement rather than an outright agreement. US officials have let it be known that there is no scope for further revising the draft.

It should be borne in mind that an expression of good intentions about IPR and labour rights is common to virtually all TIFAs. It would be unwise to expect that an exception will be made for Bangladesh. The TIFAs (and TICFA) provide a convenient forum for discussion of trade and investment related issues with the US government on a regular basis. It does not bind either party to any specific measures. Currently Bangladesh has to request for opportunities for discussing any such issues, say duty-free access, with the US government. If Bangladesh had a TIFA with the USA, it could have raised these issues in every meeting. Of course, the converse is also true, the USA could raise labour or other issues in these meetings.

The trade and investment agreements are strictly government to government affairs. These are initiated by, and negotiated between, two governments. However, the current predicament of Bangladesh with the US Generalized System of Preferences (GSP) does not fall in this category. A petition to exclude Bangladesh from GSP benefits has been lodged with the US Trade Representative (USTR) in 2007 by an influential trade union organisation of that country namely AFL-CIO. Any number of people and organisations, including Bangladesh government, may give submissions to the USTR supporting or disputing the arguments of the complainant. The USTR will be in the role of an adjudicator deciding on the merit of the arguments of both sides in light of the rules and regulations under which GSP was granted to Bangladesh. It should be noted that this was not a suo moto case initiated by any agency of the US government.

6a00e54fce1e9188340134863e7898970c-320wiThe Commerce Minister&#8217;s apprehension that the GSP case has been initiated to force Bangladesh into signing TICFA may be misplaced unless he has confidential information that AFL-CIO and the US government are working in cahoots. Such a &#8216;conspiracy&#8217; theory seems untenable in view of the fact that very recently AFL-CIO has petitioned the US government also not to sign a TICFA with Bangladesh. If there was no collusion, and the likelihood is that there was none, the signing of TICFA with the USA will in no way reduce the merit of the GSP case against Bangladesh which will proceed without let. Assuming that the government believes TICFA to be not in the best interest of Bangladesh, it may end up with both accepting an &#8216;undesirable&#8217; TICFA and also having GSP facilities withdrawn or curtailed.

A careful analysis of the TICFA and the current GSP case suggest that they are entirely separate issues. Hence each must be dealt with on its own merit. Given the Bengali mind, it is not unusual that many see a US conspiracy since labour rights issues are raised in both TICFA and the GSP case of AFL-CIO.

US laws empower the President of the country to withdraw or curtail GSP benefits with respect to any commodity or any country. In making such a determination the President must consider several matters, &#8220;one of which is whether a beneficiary country has taken or is taking steps to afford to workers in that country internationally recognized worker rights.&#8221;

The US government has stated that &#8220;based on the most recent available information including updated reports from the AFL-CIO, the GSP sub-committee believes that the lack of progress by the government of Bangladesh in addressing worker rights issues in the country warrants consideration of possible withdrawal, suspension or limitation of Bangladesh&#8217;s trade benefits under GSP&#8221; (Federal Register, 8 January 2013). This should make clear the USTR has determined that Bangladesh has not made meaningful progress toward protecting labour rights. Obviously, the defence arguments against the complaints of AFL-CIO put up by Bangladesh government and other stake holders during the hearings of 2007 and 2012 have not convinced the USTR that it has done enough in this regard. Whether or not the latest round of defence arguments presented by Bangladesh government and others will fare any better will be known when a final determination is made by the USTR.

The principal complaint of AFL-CIO is that &#8220;Bangladesh has not yet taken sufficient steps to afford internationally recognized worker rights&#8221;. Bangladesh government and employers have to convincingly demonstrate that contrary to this assertion they have actually taken effective measures to protect worker rights. With repeated factory &#8216;accidents&#8217; that gruesomely kill hundreds of poor workers and murder of union workers that are not properly investigated they have a difficult task.
- See more at: TICFA and GSP: A tenuous link | Opinion

 

[Dillinger]

@BDforever So what is the issue with signing TIFCA? And is true that ONLY 0.5% of BD products enjoy GSP?

 

[BDforever]

@BDforever So what is the issue with signing TIFCA? And is true that ONLY 0.5% of BD products enjoy GSP?

yes true and about TICFA issue read the posts

 

[Dillinger]

yes true and about TICFA issue read the posts

Lamba post padh wayega. Dude your an economics students, what's your amateur opinion. Should you guys sign the TIFCA, yes or no? AND why?

 

[BDforever]

Lamba post padh wayega. Dude your an economics students, what's your amateur opinion. Should you guys sign the TIFCA, yes or no? AND why?

LOL .. I do not know terms and conditions in TICFA, some sources are saying TICFA will harm our interest and some sources are saying USA relaxed on some issues in TICFA, so i can not say anything. the terms and conditions of TICFA should be addressed publicly because it is major issue for our country.

 

[Skies]

Assuming that the government believes TICFA to be not in the best interest of Bangladesh, it may end up with both accepting an &#8216;undesirable&#8217; TICFA and also having GSP facilities withdrawn or curtailed.

Since once USA has demanded for TICFA, BD has no options without it if it wants GSP in US. Good or bad, BD has to go through it.

Only 0.5 percent of Bangladeshi products enjoy the GSP. So it will not matter much if we don&#8217;t get this benefit.

Then why BD is worried to lose GSP?!

According to the treaty Bangladesh will be obliged to remove all obstacles for the US multinational companies, including any obstacle relating to tax. Bangladesh must repeal all conservative laws that prioritize and give privilege to local industries and companies over foreign companies. The treaty will provide protection for the US investors and Bangladesh must allow them to operate in the fuel, gas, electricity, port, telecommunication, education, health, and transportation sectors among others. So, if this agreement is signed then the service sector will go totally under the control of US multinational companies and the government will have no power over it. The local companies will suffer. The foreign companies will increase the prices of services and products tremendously to make profit. The prices in telecommunication, electricity, gas, water, medical services, education, and port services will multiply. The poor and ordinary people will suffer the most.

Seems signing TICFA will render BD helpless.

Section 18 provides that Bangladesh will have to comply with the Doha Agenda and decrease the subsidies in the agricultural sector and adopt free market policies. By complying with the Doha Agenda Bangladesh currently cannot provide more than 5 percent subsidy in the agriculture sector whereas the US itself gives 19 percent subsidy for agriculture in its land. The US is adopting very conservative policies for its own but forcing developing countries like Bangladesh to adopt liberal policies. The US is saying that after signing the treaty US investments in this country will increase many fold and we will be able to export more. But the main problem in exporting to the US market is the tax. China is exporting to the US for far less tax (3 percent) than Bangladesh (15.3 percent) even though it did not sign the TICFA.

OMG! Decreasing subsidy in agriculture will be suicidal, food cost will be increased, and we have to be more depended on India to import foods.

The US is adopting very conservative policies for its own but forcing developing countries like Bangladesh to adopt liberal policies. The US is saying that after signing the treaty US investments in this country will increase many fold and we will be able to export more. But the main problem in exporting to the US market is the tax. China is exporting to the US for far less tax (3 percent) than Bangladesh (15.3 percent) even though it did not sign the TICFA

.

But agriculture/food is the basic need.

If this treaty is given effect then Bangladesh will have to implement the patent laws before 2016, which will threaten the agricultural, pharmaceutical, and computer software sectors among many others. The WTO patent agreement allows leniency for Bangladesh. Bangladesh can have this benefit of not having to comply with patent laws for services and commodities until 2013 and for the pharmaceutical sector this will be allowed until 2016. This time will most likely be extended.

This is not the time to implement the patent law.

The USA has signed trade and investment framework agreements with a large number of the relatively small developing countries and economic blocs. None of the large emerging countries, Argentina, Brazil, China or India, have such agreements with the USA and the only developed countries to sign TIFA are Iceland, Switzerland and New Zealand. All these agreements are of a similar format with about one-half of the agreement devoted to a preamble and the other half to articles. The preamble is a statement of good intentions and objectives, while the articles contain what the parties actually agree to do.

Suggestion: If BD is unable to decide what to do, then it should do what India does to USA, because India knows well how to protect its economy.

I would say no to TICFA till 2020. But ...but, BD must take steps in protecting labour rights. Otherwise, BD's economy will suffer more.

 

[scholseys]

This government must and should sign Ticfa. Our labor rights are abysmal at best.

 

[Mattrixx]

Its a loss. A massive loss. We will be slaves of USA for long term. Its a dirty politics they played against us.
We have to sign it now. There is no other way.

 

[bernardolawrence]

Yeah i think government must sign TICFA and find out the gains in it.

 

[HIMEL@BD]

If USA allows duty free access of our products to its market after signing TICFA, then it will be a gain, rather it will give USA a opportunity to press ourselves to ensure the highest facility for the US companies in our market

 

[animelive]

loss in short term. huge gain in long term. in social and economic sides.

 

[the just]

What other countries are currently have an active ticfa treaty with USA?what are their gains and loss?have the been enslaved by this kind of treaty? We need to know that.then we,ll know if its going to be good or bad for us .

 

[idune]

Incumbents need to back out of TICFA with US

THE way that the draft Trade and Investment Cooperation Forum Agreement literally whizzed through the cabinet on Monday tends to suggest that the Awami League-led government is in a hurry to enter into a bilateral treaty with the United States before the upcoming general elections, thereby raising suspicion that it may be seeking Washington&#8217;s blessings to retain power. Such suspicion may not seem far-fetched if the push for TICFA is juxtaposed with the passage of certain amendments to the anti-terrorism law in parliament last week. As we have argued in these columns, the definition of &#8216;terrorism&#8217; in the law and certain provisions incorporated therein through the latest amendments, e.g. the stipulation that photographs, and video and audio clips used in Facebook, Twitter, Skype and other online social networks would permissible as evidences in the court of laws, seem dangerously aligned with the US perception of terrorism and its so-called global war on terror.

The amendments also authorise the Bangladesh Bank to suspend bank account/s of any person upon request from foreign countries, which could only pave the way for undue external interference. Then, of course, there is the possibility that the AL-government may be trying to pacify Washington, especially given the latter&#8217;s express disapproval and indignation with the way the former essentially muscled out Professor Muhammad Yunus from the Grameen Bank. Overall, there seems to be a strong case against the incumbents of currying favour with the US at expense of undermining the concept of a state&#8217;s sovereign equality.

Almost predictably, the government has cited similar agreements that the US signed with 90 countries and Bangladesh signed with 42 countries in defence of its push for the agreement. The commerce secretary was quoted in a report published in New Age on Tuesday as claiming that, when the bilateral forum was set up in line with the agreement, the authority of a country to take unilateral decision over any trade-related issues would be reduced.

The argument sounds somewhat tenuous, given Washington&#8217;s predilection for unilateralism in respect of economic sanctions to accounts freeze to even invasion of a sovereign country.

Moreover, such bilateral agreements appear to strengthen Washington&#8217;s hands when it comes to bypassing multilateral arrangements such as the World Trade Organisation. Although its own brainchild, Washington does sometimes finds the WTO restricting, to a significant extent, its unilateral tendencies when it comes to issues related to global trade and investment.

What&#8217;s worse, TICFA, as and when signed, would certainly weaken Bangladesh&#8217;s capacity to bargain, and also undermine its legitimacy to represent the least developed countries, at WTO negotiations. Worse still, the TICFA provision for protection of intellectual property rights under the WTO could have a devastating impact on many sectors in Bangladesh, particularly its pharmaceutical industry.

It is difficult to believe that the incumbents are not aware of adverse geopolitical and economic consequence that TICFA poses for Bangladesh; after all, these issues have been debated over and over since the initiative was first taken in 2002.

Therefore, its apparent eagerness to sign the agreement could only be explained as its willingness to compromise national sovereignty, perhaps in the hope that it would help retain power for another term, especially when its popularity has started eroding like anything.

Yet, the incumbents literally froth at the mouth when talking about its commitment to protecting national sovereignty. If they really mean what they profess, the incumbents should back out of TICFA and also scrap the latest amendments to the anti-terrorism law, if not the law itself, so that Bangladesh does not get dragged into the US&#8217;s war on terrorism.

Incumbents need to back out of TICFA with US