Published in The Financial Express on Monday, 11 May 2015.
Prospects of BD’s joining
Tariff Commission assessing pros and cons of TPP deal
The government has started assessing the impact and possible adversities of the proposed Trans Pacific Partnership (TPP) agreement on the country’s trade and investment, officials said.
The agreement is now under negotiation by 12 countries across Asia Pacific region.
The Bangladesh Tariff Commission (BTC) has taken up a research work to assess the pros and cons of the proposed TPP under instruction from the Ministry of Commerce (MoC) in this connection.
“Bangladesh does need to be more careful with respect to signing the proposed agreement. The BTC is now conducting a detailed research study on the issue to assess possible impact and adversities on country’s trade and other sectors so that the county does not face any difficulties after entering the deal,” a high MoC official said.
The state-run commission is likely to put forward a power-point presentation to the MoC about preliminary progress of the research study on the TPP in the middle of the current month, he said.
“Bangladesh will face strong challenges in exporting apparel, leather and some other items to the USA, Canada, and Japan markets if the country joins the deal. The competing countries will be Vietnam and Chile,” additional director of research at Centre for Policy Dialogue (CPD) Khondaker Golam Moazzem told the FE on Saturday.
He explained that presently, Bangladesh enjoys zero-duty facility in exporting different items to some developed countries. After entering the agreement, the same facilities will be applicable to the TPP signing countries in export and import. As a result, exporters belonging to a number of sectors of the country may face competition and challenges from their counterparts in the signatory countries.
At the same time, the compliance costs of different export items will go up substantially to match with the standard of the items like those of the TPP signing countries, he said.
The country’s investment policy will have to be more liberal to attract more investments from those countries, he added.
The country should focus more on capturing China’s current market share as well as that of the European Union (EU) and it should work to regain GSP (generalised system of preferences) facility in the US market than signing the deal, experts said.
The country should take more realistic plans to strengthen its trading position with so-called non-traditional markets including Middle East, India and China, they added.
The multilateral TPP trade pact, led by the USA, is a regional free trade agreement being negotiated by 12 countries — Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam.
The proposed accord would cover nearly 40 per cent of global economic output and one-third of world trade. Passage of the TPP is one of the primary goals of the current US administration’s trade agenda.
The TPP intends to enhance trade and investment among the partner countries, promote innovation, economic growth and development, but globally there has been criticism of the negotiations, largely because of the proceedings’ secrecy and the agreement’s widespread scope.
The Trans-Pacific Strategic Economic Partnership, as it was originally known, was conceived in 2003 by Singapore, New Zealand and Chile as a path to trade liberalisation in the Asia-Pacific region. Brunei joined the negotiations in 2005, and the Trans-Pacific Strategic Economic Partnership agreement concluded in 2006.