…before giving consent to signing TIFA, the policymakers need to do proper homework and be transparent and accountable to the citizens of Bangladesh since it is not an economic cooperation agreement at all in terms of its features, Mohammad Tanzimuddin Khan

THE prospect of Bangladesh and the United States entering into the bilateral Trade and Investment Framework Agreement looms large. The commerce minister, Faruk Khan, and the US ambassador, James F Moriarty, observed, a few days ago, that the agreement would contribute to economic prosperity of Bangladesh. Such assurances notwithstanding, some are still sceptic whether the agreement would actually deliver any positive results for a least developed country like Bangladesh, which, needless to say, has limited diplomatic capacity to safeguard its national interest.
   Jayant Menon, a senior research fellow at the Asian Development Bank Institute, in an article titled ‘Bilateral Trade Agreements’, identifies three broad categories of bilateral trade agreements – economically-motivated, strategically-motivated and event-driven – on the basis of the factors that motivate the trading partners to enter into such agreements. The proposed Trade and Investment Framework Agreement with the US falls under the category of strategically-motivated bilateral agreement as it is neither economically motivated nor event-driven. There must be sector-driven and market access-centric negotiation framework for an economically-motivated trade and investment agreement. TIFA appears to be no more than a bilateral framework containing only politico-economic commitments for trade and investment facilitation. If anyone browses the text of TIFA, s/he would see that it contains basically the agreement on forming a joint council to facilitate trade and investment of the US. There is no commitment of market access for the developing counterparts in the agreements.
   Critics have also pointed out that the US, in many cases, is not that much successful, especially in the World Trade Organisation, in pressing ahead with its agenda of forcing the small countries to embrace the trade and investment regime of US legal standards. Against such scenario, it now prefers having one-on-one negotiations by alluring them with preferential access to the US market. Obviously, through bilateral agreements, the US tends to ensure its advantage which it cannot do otherwise in multilateral forum. There are ample examples in this regard. When the developing countries including Mexico was opposing US and European Union efforts to incorporate trade and labour standard issue in the GATT negotiations during the Uruguay Round, the US separately negotiated the North American Agreement on Labour Cooperation, a supplementary agreement with its North American Free Trade Agreements partners relating to labour standard. More recently, the text of the TIFA agreement signed between the US and Jordan also marked the inclusion of the controversial labour standard issue and environmental regulations which have been opposed by the least developed and developing countries in the WTO. Same goes with the agreements signed separately with Chile and Singapore. These countries are not permitted any longer to exercise any control over capital outflow. Indeed, the US Trade Representative’s Office, in such case, is quite candid to admit that. ‘TIFAs can help focus attention on trade issues which often include barriers that the US faces, and, therefore, can help expand US access,’ it says.
   The inclusion of controversial issues in the bilateral trade agreements, in most cases, is the result of the corporations lobbying for profit maximisation and monopoly control. For instance, the Intellectual Property Committee (a coalition of 13 large US corporations, including DuPont, Pfizer, IBM, General Motors, Rockwell, Bristol-Myers, and Merck) worked with US trade representatives on a proposal to standardise global intellectual property laws along US lines, and make them enforceable under the WTO agreements. Ninety-six of the 111 members of the US delegation negotiating on intellectual property rights during the Uruguay Round were representatives from the private sector.
   After being successful in getting Trade Related Aspects of Intellectual Property Rights agreement incorporated in the WTO negotiation, US corporations now like to force US trade partners to commit to obligations that go even further than those in the WTO Agreement on TRIPS which is now more familiar as ‘TRIPS-plus’. Under the WTO agreement, the LDCs, however, have the luxury of not implementing the TRIPS obligations until the end of 2013 and also patenting of plants, plant varieties and animals are optional. Besides, in the TRIPS agreement, there is nothing on the patenting of biotechnological innovations. Currently, the ITAC-15 which is basically an advisory committee on IPR to the president, the Congress and the United States Trade Representative, is lobbying for forcing the US’s trade partners to enact ‘TRIPS Plus’ measures through bilateral trade agreements. It is represented by the bosses of the corporate houses mainly from General Motors, IBM, Crop Life America, Warnaco Group, Sidley Austin, Brown and Co, Cisco Systems and many more. Indeed, under the impact of ITAC-15’s lobbying with US government, TIFA signatory countries, for example, Laos, Vietnam, Morocco and Singapore, have already incorporated domestic plant variety protection laws based on the ‘TRIPS Plus’ model of the International Union for the Protection of New Varieties of Plants. The UPOV provides for patenting plants, animals, and even ‘essential’ biological processes for the production of plants and animals. The ITAC-15 in its report on the US-Oman free trade agreement also advises the US government to ‘continue to maintain a strong bilateral program to deal with IPR deficiencies in non-FTA countries, many of which are critical markets for our industries and which may never be FTA candidates. It is therefore essential that traditional trade tools such as Special 301, Section 301, the unilateral trade preference programs and WTO dispute settlement be aggressively employed to lift levels of intellectual property protection in those countries.’
    TIFA is not necessarily only a corporate lobbying-driven trade and investment framework. It is also broadly related to US foreign policy objectives and geopolitical goals. The US manipulates these agreements to ensure politico-economic and military gains from its weaker trade partners. Under various bilateral trade agreements, US allies in the war on Iraq and the ‘war on terror’ like Australia, Thailand, Pakistan and the Middle Eastern countries are being promised enhanced access to US markets. In this regard, a statement made by the US trade representative Robert Zoellick in declaring the beginning of the US-Pakistan bilateral investment talks in September 2004 is very much relevant. He pointed out: ‘Pakistan and the United States are partners in combating global terrorism. A BIT [bilateral investment treaty] based on the high standards contained in our model text can play an important role in strengthening Pakistan’s economy, so as to create new opportunities for exporters and investors in both economies and assist in meeting the economic conditions to counter terrorism.’ Likewise, in March 2004, Zoellick stated that the TIFA with the United Arab Emirates ‘solidifies the relationship between our two countries on an economic level which complements our strong partnership in our fight against terrorism.’ Similar sentiment he expressed in signing the TIFA with Qatar also.
   In evaluating the southern countries’ ventures to sign bilateral trade agreements with countries like the US, the EU for getting market access, Saman Kelegama, executive director of the Institute of Policy Studies of Sri Lanka, in his article titled ‘North-South Regional Trading Arrangements in South Asia: Emerging Scenario’, writes that ‘the southern countries most often ignore the details of the trade arrangement at the start and thereby undermine the cost of market access.’ In this regard, he also touches upon the conditionality imposed by the US on Sri Lanka in getting access for its readymade garment products to the US markets. The conditions include fulfilling the stipulated rules of origin providing for reverse purchase of US fabrics; amending intellectual property laws to remove the obligations for compulsory licensing; amending the competition policy legislation; also liberalisation of capital account for trade exchanges with the US. However, the government of Sri Lanka confronted resistance in 2003 when the bill to amend the Intellectual Property Rights legislation was placed in the parliament. In protest, even a local think-tank challenged the proposed bill in the Supreme Court claiming that it violated a fundamental human right of the citizens of Sri Lanka. The decision eventually went in favour of the think tank. According to Kelegama, ‘[this] costly conditionality made public interest issues irrelevant and thus the development dimension became far from clear.’
   Indeed, the US is not the only country that pushes for bilateral agreements. The European Union, Japan, and even India with its weaker counterparts also follow the same footsteps. This is being done broadly in the view that the bilateral agreements offer the stronger trade partners with the opportunities of ‘asymmetric reciprocity’, models for wider trade agreements, reward and support for domestic market-oriented reformers, and strategic partnerships. More importantly, these agreements aspire to sideline the WTO agreements to impose more radical and stringent obligations of trade and investment liberalisation and also protection measures by amending IPR legislation of the developing countries and the LDCs. Once these obligations are accepted, their position and unity to oppose the issues giving advantage to the developed countries gets weakened in the WTO.
   In this regard, in the case of Bangladesh, one must not ignore the fact that it is very influential and vocal in negotiating the interests of the LDCs in the multilateral trade and investment forums. And in many cases, Bangladesh operates as a leader on behalf of the LDCs in the WTO. Therefore, before giving consent to signing TIFA, the policymakers need to do proper homework and be transparent and accountable to the citizens of Bangladesh since it is not an economic cooperation agreement at all in terms of its features. Indeed, TIFA negotiations in Bangladesh which began in 2003 have already generated lots of controversy over incorporating issues like corruption, bilateral investment treaty of 1986, trade and environment, IPR and many alike. Against such scenario, to draw any positive conclusion about the impact of the TIFA on Bangladesh, one must be cautious and address the issues of concern over TIFA and other bilateral agreements, especially involving a weak and strong trade partners.
   Mohammad Tanzimuddin Khan is an assistant professor of international relations at Dhaka University and currently in Nepal under UNESCO-Keizo Obuchi Fellowship Programme