A US delegation is meeting with Bangladesh under the Trade and Investment Cooperation Forum Agreement (TICFA) in Dhaka today. Brendan Lynch, Assistant US Trade Representative for South and Central Asia (acting) will lead the US delegation. He expressed the United States' position on trade and investment with Bangladesh. He was interviewed by Mahadi Hasan.
Kaler Kantho : As the tariff placed on exports from Bangladesh is one of the highest faced by commodities entering the Western nations, the country is requesting duty-free and quota-free access to the US market. What do you think about the demand?
Brendan Lynch : U.S. demand for Bangladeshi exports, especially apparel exports, remains high. Bangladesh continues to be viewed as a reliable apparel supplier and even was during the COVID-19 pandemic. Despite the lack of duty-free or quota-free preferences, Bangladesh remains the third largest supplier of apparel to the U.S. market.
Kaler Kantho : Bangladesh asserts that labor standards and worker safety have significantly improved. Is the United States prepared to return the GSP to Bangladesh?
Brendan Lynch : Bangladesh lost eligibility to the GSP program in 2013 as a result of inadequacies in worker rights and unsafe working conditions. We are awaiting U.S. Congressional reauthorization of the GSP program, which expired on December 31, 2020. We commend the significant progress that the Government of Bangladesh has made in the areas of worker safety standards after the Rana Plaza tragedy, which occurred 10 years ago.
However, we note Bangladesh’s worker rights continues to fall short of international labor standards, especially with respect to freedom of association and collective bargaining. During the Trade and Investment Cooperation Forum Agreement (TICFA) Council meeting held on September 20, worker rights are a top priority for the United States in our bilateral trade relationship. We commend the Government of Bangladesh for addressing certain hurdles workers face when registering unions, and see that work is ongoing in this area. In this TICFA Council meeting, we also emphasized the importance of combatting violence against workers and union organizers, as well as anti-union discrimination and other unfair labor practices. The recent murder of Shahidul Islam, a trade union organizer who was murdered protesting unpaid wages, is evidence that concerns about the environment for union organizers and worker rights still persist in Bangladesh. The United States plans to continue to engage with Bangladesh in a collaborative manner on issues related to labor and worker rights going forward.
Kaler Kantho : Is Bangladeshi goods' duty- and quota-free access to the US market a political issue? Is it connected to democracy, ethical leadership, and human rights?
Brendan Lynch : The establishment of duty-free and quota-free access to the U.S. market for Bangladeshi goods falls under the legal authority of the U.S. Congress. The Office of the U.S. Trade Representative does not have the legal ability to create preference programs.
Kaler Kantho : Bangladesh is anticipated to lose trade privileges in a number of markets after graduating from LDC status. How can the US help Bangladesh keep its export market strong?
Brendan Lynch : Bangladesh’s potential graduation from LDC status in 2026 indicates how far the country has progressed in its economic development. While this is positive news for Bangladesh, graduating from LDC status will require Bangladesh to make additional economic reforms in line with its international commitments. One way to ensure that Bangladesh remains competitive even after graduating would be for Bangladesh to focus on labor law reform, especially with respect to freedom of association, collective bargaining, and unfair labor practices. Aligning Bangladesh’s labor laws to internationally recognized labor standards would help ensure that Bangladesh can meet the eligibility criteria of the U.S. Generalized System of Preferences program.
Bangladesh is not without support after it graduates from LDC status. The United States sees itself as a partner in our trade relationship with Bangladesh and remains committed to assisting Bangladesh continue to reform. The United States wants to ensure that Bangladesh’s economy can continue to grow rapidly after LDC graduation.
Kaler Kantho : According to the Bangladesh chapter in the US State Department's Investment Climate Statements for 2023, the political and security environment could deteriorate before the general elections. How important is national stability to US businesspeople?
Brendan Lynch : A stable political and security environment are critical factors for U.S. companies when they’re considering where to invest. If companies recognize that Bangladesh is able to conduct a free and fair election in a peaceful manner, U.S. businesses would feel more comfortable investing in Bangladesh. Countries that can best provide stability and predictability over the long term will be the most attractive.
Kaler Kantho : According to US Ambassador Peter Haas, Bangladesh will draw in more investment if it can reassure US people and investors that corruption is less common here than in other markets. Are there obstacles for US businesses in Bangladesh?
Brendan Lynch : Bangladesh should ensure that it has a strong legal framework that is unbiased and fair, and contains anti-corruption measures that promote a sound investment climate. One long-standing challenge that we hear from U.S. companies operating in Bangladesh is that it can take years to resolve business and contract disputes, including non-payment, if matters enter the judicial system. These delays negatively impact the perception of Bangladesh’s investment climate. We suggest that Bangladesh consider judicial reforms that would allow U.S. companies to settle cases and seek judgments in a fair, equitable, and efficient manner.
Kaler Kantho : Last year, US President Joe Biden launched the Indo-Pacific Economic Forum for Prosperity. Has Bangladesh been invited to this forum by the US? How might Bangladesh profit from this forum?
Brendan Lynch : We are pleased that Indo-Pacific Economic Framework (IPEF) was launched with such an initial strong and diverse group of IPEF Partners, and we are focused on delivering concrete economic outcomes as quickly as possible. The United States has made clear that any decisions regarding new members will be made through a consensus-based decision-making process.
Kaler Kantho : The Bangladeshi government has not enacted any regulations governing responsible business conduct (RBC) or set any norms in this regard. What significance does this RBC have for Bangladesh, particularly in the viewpoint of the US?
Brendan Lynch : Since the signing of our Trade and Investment Cooperation Forum Agreement in 2013, the United States has strongly advocated for Bangladesh to engage in strong corporate governance and responsible business conduct, including sustainable and socially responsible practices, as these factors are increasingly important to investors. Government policy that is predicated on transparency is also key to attracting U.S. investment.
Kaler Kantho : Thank you.
Brendan Lynch : Thank you, Kaler Kantho.