by Md Mazadul Hoque in Dhaka;-
The United States is the latest to join Japan, China and India in recent days to woo Bangladesh, an emerging economy. There are multiple reasons for doing so, but mainly its economic progression, which was achieved in the shortest possible time.
It is a matter of pride that Bangladesh’s economy has already gained the ability to join the horse race. The US, known as the leading economy in the world, has recently expressed optimism to be connected with Bangladesh on many affairs. Mainly, both the countries are aiming to intensify their economic ties.
The other important factor is to increase defense diplomacy. If the US takes sharp decision in respect to reopening of GSP facilities for Bangladesh, it would be a blessing for us. Considering current the pandemic situation, the US move would help Bangladesh from huge economic loss. There are no reasons to be worried because the US has indicated it would be with Bangladesh in any situation.
Very recently, US defense secretary- Dr Mark T Esper all of a sudden made a phone call to Prime Minister Sheikh Hasina. In the telephonic conversation, Dr Mark T Esper assured Bangladesh in resolving long pending Rohingya issue. Besides, US is expected to enhance defense cooperation towards Bangladesh under Indo-Pacific Strategy- defense secretary said, adding that the two countries will continue to work closely in facing the emergency situation caused by the COVID-19 pandemic.
In this crisis moment of pandemic, the telephonic discussion is a ray of hope for Bangladesh economy that was running with over 8 percent GDP growth rate just a year ago.
In the wake of friendly relations, Dhaka and Washington jointly began to move ahead economically with historic agreement titled “Trade and Investment Framework Agreement (TIFA)” signed in 2001. After a decade of negotiation and a series of name changes in other cases with four other countries- Trade and Investment Cooperation Forum (TICF), Trade and Investment Development Cooperation Agreement (TIDCA), Framework Agreement for Trade, Economic, Investment, Technical Cooperation (FATEITC)- TIFA has become Trade and Investment Cooperation Forum Agreement ( TICFA) for Bangladesh and was jointly signed on 25 November, 2013.
The agreement is aimed at fostering bilateral trade and investment for creating jobs, improving technology and enhancing development. Besides, this historic agreement is expected to expedite the flow of trade and investment activities between the two nations. It recognized the importance of promoting the observance of other issues such as intellectual property right, environment, workers rights in accordance with laws of each country and in line with the international agreements as applicable to the countries.
This will pave way for stronger engagement between the parties to resolve some crucial trade issues like Generalized System of Preference (GSP) restoration. The duty- free Quota- free access of Bangladesh’s exportable to US market. The agreement also said US investment in Bangladesh would be increased.
In recent years, the US ranked first in terms of injecting Foreign Direct Investment (FDI) into Bangladesh. FDI has become one of key issues in the talks held in electronic media. Besides, the country’s think tanks are now raising concern regarding poor inflow of FDI. The steps taken by present government to bring foreign capital are under process. Bangladesh Bank (BB) sources said as of March, 2020 total FDI stock recorded at US$ 18858.82 million which came from different countries. Of which the USA brought US$ 3813.61 million- highest among 20 countries. Truly saying, US cooperation in Bangladesh defense sector is remarkable. The US is the second largest market for locally-made RMG products after the European market. According to newspaper report, Bangladesh’s apparel exports to the US stood at $ 5.93 billion in 2019 against $ 5.06 billion in 2017. On the contrary, BGMEA revealed that RMG export to EU market accounted for $ 20.42 billion in the calendar year 2019. It is important to note that the US with which Bangladesh enjoyed almost $7 billion in trade surplus in 2019.
A leading Japanese daily -Nikkei Asian Review published a report titled “US uses defense diplomacy to woo Bangladesh away from China”. According to the report, Bangladesh has been buying more arms from the US since the 1980s, with purchase reaching $ 110 million in the 10 years through 2019. Bangladesh had been spent $2.59 billion for purchasing military equipment from China since 2010. Defense diplomacy is part of Washington’s broader Indo-Pacific strategy.
In June 2019, the Department of Defense released its first report on the strategy. In which it recognized Bangladesh as an “emerging partner” alongside Sri Lanka, Nepal and the Maldives in South Asia, the report said, adding that since 2018, it has dispensed an additional $60 million to help pay for Bangladesh’s maritime security and address other issues of critical concern.
The first ever high level “Economic Partnership Consultation” held recently between US and Bangladesh gave green signal regarding widening of existing economic relations. The US side expressed optimism to expand economic activity in Bangladesh. The US is expected to invest in the arena of ICT, energy and Pharmaceuticals.
The virtual meeting ended with signing an air transport agreement that helps to deepen bilateral relations. It was observed that the US expressed dissatisfaction over labor rights and safety issue for workers in apparel sector in Bangladesh. The dissatisfaction came following Rana Plaza collapse coupled with frequent fire incidents in RMG production centers. Besides, many allegations came from International Labor organization (ILO) regarding non-compliance of labor rights in Bangladesh. The newspaper report says that Bangladesh has already addressed most compliance related to labor rights sought by the ILO.
There is no denying that foreign remittance is our key earning source next to export earnings. So, the need for push skilled and semi-skilled working people to the US labor market is a timely steps one. It is reported that Middle Eastern countries including Malaysia are now showing willingness to hire unskilled labor force from Bangladesh.
The US might welcome Bangladeshi people through expanding the number of Diversity Visa (DV) Green Cards. Following LDC graduation in 2024, Bangladesh economy is set face hurdle to move forward swiftly with COVID-19-ravaged economic indicators. GSP facilities by European Union might have been stopped. So, the US- an ally of Bangladesh, might take further decision to reconsider regarding resumption of GSP facilities. Nevertheless, the current situation demands duty- free, Quota- free access of Bangladesh’s exportable products to the US market. Historical TICFA deal announced a wide range of economic activity between the two nations.
Alongside executing Indo-Pacific strategy, the move is a must in light of TICFA aiming to fulfill the objectives that both Dhaka and Washington has been seeking.