Govt decides not to sign Tifa

Financial Express | 18 May 2010

Govt decides not to sign Tifa

US sends draft of new deal for consideration

Nazmul Ahsan

Bangladesh will not sign the Trade and Investment Framework Agreement (Tifa) with the US as the draft agreement has a number of issues that might go against its interest, a top official in the Prime Minister’s Office (PMO) said.

The decision of the government has recently been conveyed to the US Embassy in Dhaka. The US administration has taken the decision of the government rather easily despite the fact that the two countries had been engaged in negotiations on Tifa for about six years since 2003.

The US has, however, sent another draft agreement to the Ministry of Commerce (MoC) for negotiation. The new draft agreement to replace the proposed Tifa is, titled, ’Trade and Economic Cooperation Forum,’ according to high official of the ministry.

"We will not sign Tifa agreement with the US as the draft agreement has given rise to controversies", a PMO high official told the FE.

"We need a broad-based agreement with the US to cover trade, investment and other bilateral issues," he added.

Officials in the MoC said the new draft agreement on Trade and Economic Cooperation Forum between the US and Bangladesh has contents almost similar to that of Tifa.

"I have not found any major changes in the new draft’’, a commerce ministry official said.

He said the democratically elected government has been forced to scrap the Tifa through misinterpretation and politicization.

He, however, did not disclose whether issues like labour and intellectual property rights, which were included in Tifa and opposed by the government, have been incorporated in the new draft.

"We need a platform with the US in our own interest," another top MoC official said.

Earlier, Commerce Minister Faruk Khan repeatedly asked the US government to exclude the issues such as labour and intellectual property rights from the Tifa draft.

The recent decision of the PMO on Tifa came following a proposal of the MoC, sent to Prime Minister Sheikh Hasina in late 2009, sources said.

The MoC in its proposals, sent to the PM, maintained that clauses relating to labour, intellectual property rights and environment issues in the proposed Tifa draft were contrary to the interests of the country.

The United States is the single largest export destination of Bangladesh with an annual export earning of above $4.0 billion or about 40 per cent of the Bangladesh’s total annual export.

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  • Govt decides not to sign Tifa22-May-2010 | manzur ahmed

    About NPDTA TIFA and TECF
    May 18, 2010

    Bangladesh has taken all out initiatives to get duty-free market access in the US under the New Partnership for Trade Development Act (NPTDA), 2009, while on the other hand it has decided not to sign Trade and Investment Framework Agreement (TIFA) as it contains matters relating to IPR and labour standards issues said to be detrimental for the interest of Bangladesh.

    To understand the implications of NPDTA and TIFA a comparative assessment and clarifications of the respective provisions of NPDTA and TIFA on concerns relating to IPR and labour standards should be useful in deciding whatever Agreement we are going to sign with US, NPDTA, TIFA or proposed ’Trade and Economic Cooperation Forum’-TECF (Similar to US-Swiss or US-Iceland Agreemnt as preferred by the Commerce Minister). All three documents NPDTA (already accepted by Bangladesh), TIFA and ’Trade and Economic Cooperation Forum’ (TECF) contain provisions relating to IPR and IPR and labour standard.

    Unlike NPTDA, TIFA and TECF provisions on IPR are without prejudice to the WTO TRIPS Agreement, wherein the LDCs, have the flexibility of not implementing the TRIPS obligations until the end of 2013 with the provision of extensions until required compliance capacities are developed.

    Moreover, under TIFA and TECF (common contents) terms Bangladesh will be able to promote its offensive interests in areas of transfer of technology, compulsory licensing (including in sectors like pharmaceutical ingredients, biotechnology, energy related technology transfer etc) and technical assistance for capacity building under the terms of the TRIPS Agreement which the US need to comply as an obligation under WTO. Moreover without TIFA US will be free to impose its own domestic IPR laws on imports from Bangladesh as proposed in NPTDA.

    The TIFA and TECF provisions on labour issues shall entitle Bangladesh to comply only with its domestic laws on the respective labour issues and its ILO obligations. This obligation is applicable irrespective of whether Bangladesh is a party of TIFA/TECF or not. Without TIFA/TECF US will be free to impose its own domestic labour laws on imports from Bangladesh as proposed in NPTDA.

    On the other hand NPDTA includes provisions that would require recipient nations to adopt and maintain core labor rights as identified by the International Labor Organization. The legislation also puts additional conditionalities and parameters on compliance of market-based economies, practice Rule of Law, recognize political pluralism and protect human rights.

    The bill also provides unilateral authority to US Agencies to conduct investigations in the affairs of Bangladesh in respect of protection of intellectual property rights, workers rights and environment concerns and enable the United States to impose sanctions on Bangladeshi exports to its market.

    Unlike TIFA/TECF, integral to NPTDA is the idea that Bangladesh respects the IPR of US companies, clauses on labour and environment issues, otherwise, Bangladesh will be subject to whatever trade penalties the US is able to impose under its domestic laws which may even lead to import ban on also MFN basis.

    Options for Bangladesh: As is evident from the above discussion, while TIFA/TECF affirms our rights and obligations committed under WTO, other global agreements, conventions and sovereign domestic laws, NPDTA rejects all of them outright. It is therefore most imperative and prudent for Bangladesh to establish the fundamentals of our terms of trade and economic relations with US under TIFA/TECF to safeguard our heard earned policy space acquired through painstaking global negotiations for about last forty years.

    TIFA/TECF is not a preferential agreement in itself. It is the fundamental framework of trade and economic relations with US based on which subsequent Agreements are negotiated to strengthen and streamline mutual trade in specific areas of trade and investment in goods and services.
    For Bangladesh TIFA/TECF is an essential first step to chart the future of Bangladesh-US trade relations giving both parties a framework from which to work. A next step from there could be negotiating a bilateral free trade agreement with US or neutralizing the hostile provisions of NPTDA so that the WTO and other international commitments, flexibilities and policy space available to both the parties along with their respective domestic laws and regulations are upheld.
    Manzur Ahmed
    Chairman: Fair Trade Advocacy Centre
    Chairman: FBCCI Standing Committee on WTO and RTAs
    Email: mahmed019@hotmail.com, a.manzur@yahoo.com

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