News Report The US led Trans Pacific Partnership (TPP) agreement is likely to stand as a sword for Bangladesh that would cut from both the ways, according to the business analysts. The TPP is like a free trade business deal among 12 nations of the Pacific Rim. Countries finally agreed to ink the deal are Singapore, Burnei, New Zealand, Chile, USA, Australia, Peru, Vietnam, Malaysia, Mexico, Canada and Japan. Bangladesh Readymade Garment (RMG) sector would be hit hard when the TPP deal goes into operation. Bangladesh economy largely depends on the RMG sector. Around US$30 billion income comes from the RMG sector annually. This sector would face unhealthy competition with Bangladesh rival Vietnam. Vietnam will get duty-free access in all 12 countries including the USA. Whereas Bangladesh is to pay around 15 per cent tax to export RMG products to the US market. Some of Bangladesh RMG products enjoyed GSP facilities in the US market, which was also suspended after the collapse of Rana Plaza at Savar in 2013 raising the workers safety and labor rights issue. The US administration put forward 16 conditions for restoration of the GSP. Bangladesh did a lot in fulfilling all conditions but still the GSP remains a far cry. The US officials lauded the progress of fulfilling the conditions but opined that more have to do for restoration of the GSP. Not only the US market, Bangladesh would also face unhealthy competition with Vietnam in future while exporting RMG products to in Japan, Australia, New Zealand, Chile and Peru. They are TPP countries and the Vietnam would be eligible to send their products without any tax and Bangladesh would have pay tax for doing business with these countries. Vietnam has already showed its RMG muscle by planning to invest around US$3.6 billion in the RMG sector. In fact, Bangladesh RMG sector’s competitive strength would largely depend on low labor cost. Bangladesh RMG workers receive minimum wage US$68 per month and Vietnam is paying US$128 per month as minimum wage. Question has already been raised whether Bangladesh can join the TPP? The US side also pleads for Bangladesh’s joining in the TPP deal. Bangladesh can join the TPP, but it would have to pay heavy price for joining TPP. One of the conditions of joining TPP is slashing down of the custom tariff. The average custom tariff in Bangladesh is around 45 per cent, which would have to cut drastically. The US position is that the TPP deal would cut taxes imposed on US products throughout the world and that would popularize ‘Made in America’ in the globe. Another condition is to give minimum wages to workers according to the international standard. In Bangladesh minimum wage is legal binding for the RMG sector. There is no legal binding of minimum wage for other industrial sector. There is a legal provision for minimum wage for the agriculture workers, which is not international standard. Special commitments to protect labor standards in the export processing zones (EPZs) would be required to join the TPP. Access of fair, equitable and transparent administration and judicial proceeding in the line of US standard should have to ensure for joining the TPP.
