Bangladesh, US Trade Ties under Biden Administration

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The United States happens to be Bangladesh’s 46th major trading partner that was worth $9.0 billion in 2019. Imports from Bangladesh stood at 2.3 billion dollars, while exports stood at 6.7 billion dollars against 5.06 billion dollars in 2017. The US trade deficit with Bangladesh was $4.3 billion in 2019.

There is absolutely no reason to hope for a change of US policy under President-elect Joe Biden regarding economic relations with Bangladesh unless Bangladesh addresses the US concerns.

THE UNITED STATES has many reservations about tariff and non-tariff barrier on the exports. US companies exporting medical equipment to Bangladesh face registration challenges with the recent implementation of the Drug Control Act of 1940, especially the treating medical equipment under pharmaceuticals.

(BTMA) statistics show Bangladesh in 2018 imported 8.2 million bales of cotton, which some 37.06 % cotton was imported from Africa, 26.12 % from India, 11.35 percent from the Commonwealth of Independent States (CIS) countries, 11.14 % from the US, 4.65 per cent from Australia, and the others, 9.65 %, from other countries.

Bangladesh requires fumigation of imported U.S. cotton at the port of entry, to safeguard locally grown cotton from possible boll weevil infestation. In 1966, the then Pakistan government had prepared the “Destructive insects and plants” rules that asked for quarantine certificate from Quarantine Department before releasing US-origin cotton. This measure was to safeguard cotton stated in the then West Pakistan from competing with the US cotton and
Bangladesh continued to follow the same rule, sadly.

As a way to resolve the confusion, a technical expert team from the US Department of Agriculture Animal and Plant Health Inspection Service (APHIS), with their Bangladeshi counterparts, visited the Chittagong port in September 2018 to inspect imported US cotton and convince that there is no occurrence of boll weevil.

Washington has continues to press Dhaka to drop the “unnecessary fumigation requirement” for U.S. cotton.

Bangladesh still cannot set up a comprehensive legal framework to adequately and effectively protect and enforce IPR. The federal government enacted the Copyright Law in July 2000 (amended in 2005), the Trademarks Act in '09 2009, and the Geographical Indication of Goods (Registration and Protection) Act in 2013. The Department of Patents, Designs and Trademarks (DPDT) drafted a new Patent Act in 2014, which remains being reviewed by the
Ministry of Industries.

The Patents and Designs Act, 1911, continues to be applicable in Bangladesh. Additionally, the DPDT has drafted an “Innovation & IP Policy Strategy.” But unfortunately, Bangladesh is yet to complete the procedure of upgrading the IPR regime as an associate of the TRIP agreement.

A number of US firms, including pharmaceutical companies, manufacturers of consumer goods, and software organizations have reported violations of their IPR. Investors noted that the authorities investigate counterfeit goods distributors when informed, however they rarely initiate independent investigations.

After the Rana Plaza building collapse which killed a lot more than 1100 people, mostly garment workers, the US suspended the GSP (generalised system of preference) facility for Bangladeshi products including tobacco, sporting equipment, porcelain china, plastic products and a tiny number of textile products citing “serious shortcomings” safely and labour standards.

However, Bangladesh's exports to the US market is not hampered as a result of suspension of GSP facility, as significantly less than 1.0 per cent of the exportable items got that facility.

The suspension was on the ground of insufficient progress by the Bangladesh government in ensuring workers’ rights according to international standards.  In July 2013, USTR provided Bangladesh with an Action Anticipate worker rights and safety. It really is believed if it's implemented, it can provide a basis for the then President to consider the reinstatement of GSP trade benefits.  In the bilateral meeting following TICFA signing, the Dhaka government shared its progress to-date on addressing the many factors of the Action Plan.

THE UNITED STATES also expressed reservation about Bangladesh’s rice export subsidy, its policy in regards to a cap on foreign direct investment (FDI) in the insurance sector, digital trade, investment climate and intellectual property rights.

The US administration did not give a clear pledge for restoring the suspended GSP facility. They also have expressed satisfaction over the progress of implementing an operating arrange for regaining GSP facilities. Still, their main problem of concern remains the health of labourers in the garment industries.

The strict restriction on immigration of President Donald Trump administration has hampered immigration of Bangladeshi nationals to the US. Bangladesh nationals are travelling to the US both legally and illegally.

The remittance from the expatriate community is among the three major propellers of the economy. Bangladesh will love the benefit from any soft law on immigration and naturalization for against the law immigrants from President-elect Joe Biden.

Bangladesh is asking for assistance for technical support for Trade Facilitation Agreement, support because of its graduation to a developing country. There have been 119 developing countries including 44 LDCs that enjoyed the power. Around 3,500 products are usually qualified to receive duty-free treatment from all GSP beneficiaries. Furthermore, some 1,500 articles of LDCs meet the criteria for tariff-free market access. The common tariff on Bangladeshi imports is 15.40 percent. In 2019, US customs collected $1.03 billion in customs duties against the import of Bangladeshi goods worth $6.68 billion. US trade policy in Trump’s regime clearly sidelined the multilateral trade negotiation process and needed bilateral arrangement.

Washington has been trying for a bilateral agreement on monetary co-operation. The two countries signed the TICFA agreement on 25 November 2013 after one decade of negotiations on a US proposal called Trade and Investment Framework Agreement (TIFA) in 2001. TIFA has been renamed as Trade and Investment Cooperation Forum Agreement (TICFA) with a modification of what cooperation and forum.

The United States believe that with TIFCA agreement, the two countries can work together more closely to address issues the trade and investment concerns. Also, they are interested to track and discuss Bangladeshi efforts to really improve worker safety and worker rights.

This is a crucial priority for the US as Bangladesh seeks to avoid more tragedies in its ready-made garment sector. The negotiation under TIFCA is not very encouraging so far.

The last meeting in September 2020 between the official of two countries on monetary co-operation, USA retreated the same judgment of FTA in the only choice for preferential treatment in the US market or joining any multilateral FTA wherein USA is an associate country.

In this age of globalization and a free-market economy, different countries are signing bilateral, regional even multilateral trade agreements including goods, services, free movement of people, trade, investment, services to talk about each party’s strengths with the counterpart for best usage of possible opportunities. Bangladesh has trade surplus against the united states and there is no likelihood of “tax loss’’ for Bangladesh.

For any change under the new Democratic government led by Joe Biden, Bangladesh must do something for the enforcement and protection of IPR, a non-tariff barrier such as for example registration of medical equipment under drug, stop additional fermentation test of raw cotton, restriction on FDI in-service sector amongst others together with concerns about human and labour rights

Source: https://newsnextbd.com

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