Trans Pacific Partnership the way forward
Md Abdus Sobhan

The TPP could provide additional market access for goods and services of existing FTA and future TPP partners

The Trans Pacific strategic economic partnership agreement, known as TPP, is a multilateral free trade agreement which was originally signed in 2005 by Singapore, New-Zealand Chile, and Brunei. A large number of new countries including Australia, Malaysia, Peru, Japan, US, Vietnam, Mexico and Canada are in negotiations to join the group which was set up with the aim of reducing all trade tariffs to zero by the year 2015.

In August, US Ambassador Dan Mozena expressed the hope that Bangladesh will seek to join the TPP. He said it would provide a big boost to Bangladesh exports. “I believe joining TPP would promote Bangladesh as a huge player in the global market pharmaceuticals, finished leathers, jute and many other items. Bangladesh would be able to take full advantage, using demographical dividend as millions of young Bangladeshis are entering into their productive years.”

TPP is a comprehensive agreement covering all aspects of trade rules and requirements. On the positive side, by reducing tariffs and non-tariff barriers, the TPP may boost exports and economic cooperation, create jobs, facilitate good business practices, lower barriers to trade and investment, protect workers’ rights and the environment, and bring many benefits for consumers in all member countries.

On the other hand, the TPP may harm domestic production, increase import deficits, affect farmers and increase expense for complying with intellectual property rules. So, it is bound to be discussed heavily.

The key interest for so many states joining the TPP is the huge area it could cover. TPP has the potential to form a building block for regional economic integration across the entire Asia Pacific region.

It could provide additional market access for goods and services into the markets of existing FTA and future TPP partners. It offers a framework for engaging with countries with which Bangladesh do not have existing bilateral trade agreements.

The Confederation of Asia Pacific Chambers of Commerce and Industries secretariat has recently sought the views of its members on the TPP. Among the members’ responses, Ho Meng Kit, CEO of the Singapore Business Federation (SBF) said: “The attractiveness of the TPP is the high standard of the agreement that will better meet the needs of businesses in the 21st century . The TPP is not a replacement but a complement to the important work done in the Doha development agenda at WTO.”

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry has been quoted as saying: “the TPP was a welcome and positive development for a trading nation like Australia. The TPP offers Australia a good opportunity to maximise the country’s economic advantage in one of the fastest growing regions of the world.” He said, concluding a deal would be difficult but it should still be pursued as it could help overcome some of the limitations encountered with the Doha round of global trade talks and has the potential to be a boon for services.

Suresh Shah, vice chairman of Ceylon Chamber of Commerce, a chamber leader of Sri Lanka, concurrently vice president of CACCI, noted: “In principle, multilateral free trade agreements should be encouraged since they provide businesses with larger markets within which to operate thus help economies to grow.”

Bangladesh is a well located country that could benefit from this type of partnership and free trade area. Particularly because it has many competitive and comparative advantages to other countries, particularly in the size of its growing workforce (or demographic dividend) and its potential in RMG and other sectors.

The US ambassador has told business leaders that he hoped the government of Bangladesh, business bodies and the civil society would rigorously explore the possibility of joining the TPP. He said he believes it will “help Bangladesh become a middle income country. The signing countries with Bangladesh partnership is at its all time high. The relationship and partnership among the countries will be deeper, broader and stronger.”

If Bangladesh joins the TPP group, we will get more benefits than other members and this will help boost exports with a goal of becoming a middle income country.

Right now the biggest concern on the economic horizon is going to be slow growth as global trade and investment has been affected by the slow-down in almost all developing countries. We certainly need to discuss sources of long term growth. Sustaining long-term growth is more essential than ever for Bangladesh. If the country is going to develop and become an emerging tiger, it should join the TPP without any delay. The sooner, the better.

I believe we should move forward with TPP. Despite difficulties and negotiation issues, joining this prestigious group will help better achieve our desired development goals.
 

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Md Abdus Sobhan

Abdus Sobhan is a banker

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