Dhaka, Washington to ink trade, investment deal soon
Bangladesh and the United States are likely to sign soon a trade and investment cooperation deal to facilitate increased US investment in this South Asian country, especially in its energy sector, officials said on Friday.
Furthermore, the deal, for which terms and conditions are being worked out by both sides, is expected to help Bangladesh to export more of its products to the US.
If everything goes ahead unhindered and the terms and conditions are agreed upon by both parties, the deal under the title of ‘trade and investment cooperation forum’ will be signed during an expected visit by a high-level functionary of the US administration, a senior official of the ministry of commerce (MoC) said.
Officials of the ministry of foreign affairs in Dhaka are expecting that the US Secretary of State Hillary Clinton will visit Bangladesh in the near future to sign the deal between the two countries.
Sources in the US embassy in Dhaka said the deal is likely to be signed soon, but they, however, could not confirm whether Ms Clinton would visit Bangladesh on the occasion of signing any such deal.
“The deal, upon its signing, will pave the way for a substantial increase of US investment in Bangladesh mainly in its energy sector and also boost opportunities to help expand bilateral trade,” a senior official of the MoC said.
Foreign ministry officials said mutual cooperation in areas of food security, climate change mitigation and fight against terrorism, would also be included in the deal.
The new US Ambassador to Bangladesh, Dan W Mozena, at his first news conference in Dhaka last Thursday, also reiterated that signing of the ‘strategic deal’ for the forum would be his first priority.
The forum will be a platform for stakeholders of both the countries to discuss and sort out trade- and investment-related issues and settle them, Mozena told the reporters.
“The annual trade between the two countries stands now, in value terms, at $5.0 billion and the bilateral trade balance has mostly been in favour of Bangladesh that exports some $4.0 billion worth of goods, mainly the ready-made garment (RMG) to north America, mainly the US,” a source in the Dhaka embassy of the US told the FE.
Bangladesh is also lobbying to get duty- and quota-free access for RMG products to the US, despite a strong resistance from US textile manufacturers who fear such a concession to Bangladesh might hurt their own business interest.
The US imports around 40 per cent of Bangladesh’s annual garment exports worth $18 billion, while more than 50 per cent are imported by European Union (EU) and the rest by Japan, Australia, New Zealand, South Africa and India, exporters said.
As of now, Bangladesh garments enjoy already duty-free access to the EU and now in India which recently announced such a facility.
Officials at the Board of Investment (BoI) said so far the US was one of the largest source of foreign direct investment (FDI) in Bangladesh but owing to weekend, they could not give an exact figure.
But they said among the US hydrocarbon explorers, Chevron alone had so far invested more than $1.0 billion and ConocoPhilip, around $200 million.
They said the US energy firms were in the process of making more investments in Bangladesh as they had own deals for further exploration of natural gas in their respective onshore and offshore blocks, officials of the ministry of power, energy and mineral resources said.
The US investment initiatives have taken a new turn after Robert O Blake, US assistant secretary for the central and the South Asia told the US Bangladesh Advisory Council Congressional Reception in Washington in September last that Bangladesh was a destination for the US investment and a market for its products.
Bangladesh attracted $913.32 million as FDI in 2010 against $700.16 million in the previous year.
The FDI in 2011 is expected to be bigger as, besides the US energy firms, Chinese, Indian and South Korean firms have registered a good number of proposals for making investment in apparel and tourism sectors in Bangladesh.