US pullout from TPP benefits BD: Muhith

Published in The Financial Express on Thursday, 26 January 2017 

US pullout from TPP benefits BD: Muhith

Businesses, economists agree on outcome of new US admin stance

FE Report

 

 

Bangladesh would benefit from the US pullout from the 12-nation Trans-Pacific Partnership (TPP) deal, Finance Minister AMA Muhith said Wednesday.

“A group was formed who could have got preference where Bangladesh’s competitors were also included. Since it (TPP) is now over, we are benefited,” said the minister about the step taken by the new US administration.

Mr Muhith was talking to newsmen at his secretariat office after a ceremony as he stepped into 84th year on the day. Officials from finance division, bank and financial institutions division, Sonali Bank and the Investment Corporation of Bangladesh (ICB), among others, greeted the minister on the occasion.

On January 23 this year, newly elected US President Donald Trump signed an executive order formally withdrawing his country from the TPP deal in line with his election- campaign pledge.

Last February, 12 countries bordering the Pacific Ocean signed the pact aimed at deepening economic ties, slashing tariffs and boosting trade. Those who signed the deal are: USA, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile, and Peru.

These countries represent nearly 40 per cent of the global economic output. The deal was also designed to create a new single market like the 27-nation European Union.

Mr Muhith said Vietnam, which also did well like Bangladesh, was included in the TPP deal but Bangladesh was kept out from the bloc. “There was a chance of creation of discriminatory position for us from the TPP deal,” he noted.

Replying to a query, the finance minister said he has no plans for a big reform in the days to come in the economic arena. But he wants formulation of mergers and acquisitions law in the near future.

Asked why people of the country should remember him in the future he said there are many things which may keep him in people’s mind. He referred to consecutive handsome growth in gross domestic product (GDP) and providing big budget in this case as example.

Asked whether he has any dream to be president of the country as there are many such examples worldwide of finance minister becoming president, he said, “It could happen, but I don’t have such wish.”

Contacted, an additional secretary of the Ministry of Commerce said Bangladesh got relief from an unwanted risk which was possible to be stemming from the US-led trade pact.

“Vietnam is a major competitor of us in global trade, especially in the field of readymade garment export. It was supposed to enjoy duty-free access to the US and other TPP member-country markets, which could have increased our competition. Now we are free from the risk,” he said.

Meanwhile, economists and businessmen have termed the pullout of the US from the TPP agreement ‘positive’ as they think Bangladesh could avert possible challenge–in its overseas trade–following the latest decision of the new US administration.

Executive director of the Centre for Policy Dialogue (CPD) Mustafizur Rahman sees the US pullout from the TPP as a sort of relief for Bangladesh since Vietnam could have enjoyed tariff preferences on the US market under such arrangement.

He, however, said concern remains over Vietnam enjoying tariff preferences in 11 other member-countries of the pact.

“Though the US pulled out from the TPP deal, it may have bilateral free-trade agreement with Vietnam and other competitors of Bangladesh. So, Bangladesh has to be cautious about it,” he said.

Talking to the FE, Aftab-ul-Islam, former president of the American Chamber of Commerce in Bangladesh (AmCham),  said the US decision on ending its participation in the TPP deal can cast a positive impact on the overall business activities of Bangladesh.

“Bangladesh will be benefited from the US’s decision on pulling out of the TPP deal,” he said. Mr Islam also said the decision will help Bangladesh’s readymade garment products get rid of increased competition on the US market.