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Recipe For Rescue

January 30, 2017

US president Donald Trump’s presidential order on Trans Pacific Partnership (TPP) is going to have economic ramifications for US allies in Asia. However, the decision is greeted with a sigh of relief and is welcomed by Bangladeshi RMG exporters. There are many Bangladeshis who debunk the claim that US withdrawal from TPP will be beneficial to Bangladesh. They underscore Trump’s new border tax , which is floated but yet to be finalized, as an impediment.

Most Bangladeshis despised President Trump for his anti-Muslim stance and rigid immigration policies. His presidential order regarding TPP is seen as a boon by many here. For the order will slash the competitive edge of Vietnam, a strong competitor of Bangladeshi RMG goods in US market , which is being governed by a communist regime.

Back in 2015,I wrote a two-part article delineating the adverse impacts of TPP on Bangladeshi RMG exports .

Cotton blouse, cotton trousers, cotton underwear, knit shirts, non knit shirts, slacks etc are the major apparel items that Bangladesh exports to US. Vietnam also exports these items to US. TPP contained provisions like yarn forwarding, Tariff Preferential Level(TPL) and short supply list that would permit it to import raw-materials from non-member countries to enjoy TPP tariff benefits. If TPP came into being, Bangladesh would cede a significant US market share to Vietnam.

According to a study by University of Zheijiang’s School of Economics and Management, TPP would cost Bangladesh $101.6 million every year. Trump’s order , for the moment, seems save the money and brings smile to RMG exporters here. Many argue that this step may push TPP member countries to embrace free trade regimes like Regional Comprehensive Economic Cooperation (RCEC) and Free Trade Areas of Asia and Pacific (FTAAP) where China will hold the leading role. Some commentators, however, pay no heed such claim. They hold different views.According to Ankit Panda, senior editor at the Diplomat, these alternative free trade regimes lack stringent standard levels like the TPP. Under such regimes China, possessing an astonishing capacity to produce everything, may dump goods to member countries and pose serious risks to their industries. This risk will generate further steam to lay down rules of these agreements. Ankit thinks it is too early to say whether China will gain significantly from this order, but one thing is certain that the decision will limit US strategic interests to this region.

In the coming months Trump’s administration will hammer out more trade policies and bi-lateral trade talks. One of the main objectives of Trump administration is to create jobs for the Americans. Bangladeshi RMG industry can help Trump to meet that goal. At this moment, hundreds of thousands of foreigners are working at RMG sector occupying mid-level, senior posts of management and technical section. Thousands of such jobs may be allotted to Americans for an annual decent salary. Moreover, present factory remediation process can be extended to create thousands of more jobs in areas like inspection, technical assistance etc. Revenues stemming from duties of Bangladesh’s apparel exports can be used to pay their salaries.

Bangladesh developed a brilliant solution for its RMG exporters: Back-to-Back LC. Trump administration can make some laws to allow only few American banks to offer this service for all US bound exports and may help them grow their businesses here. This, In turn, will create hundreds of jobs in US financial sector.

Trump administration can also make rules so that all US bound apparel items need to be transported by US-registered cargo ships and planes.

Another area that can create business, as well as jobs, for US-Bangladesh companies is education. At tertiary level, millions of students need textbooks. US publication houses can forge ties with Bangladeshi publishers and can offer low-price edition of these textbooks to university, medical college and engineering students. Our universities, both public and private, lack quality teachers. There are dearth of teachers at colleges and higher secondary level. US may send teachers , 2nd and 3rd generation Bangladeshi Americans as well as Americans of all stripes, to Bangladesh. Remuneration packages may not be as attractive as those in US, but nomadic academicians and scholars who want to install themselves briefly into a country where they could find a blend of Indian culture and Islamic rituals may find these opportunities intellectually productive.

Aviation industry is another sector where the joint-ventures can flourish. Every year during the Hajj season, annual congregation of Muslims, national flag carrier suffers from shortage of aircrafts. For this reason, it hires aircrafts from foreign airliners to transport pilgrims. A tri-nation initiative can be formed to meet this seasonal surge. This will create jobs and businesses for the Americans.

President Trump’s remarks during the election campaign wounded many people. Bangladeshis are no different. But he is that reality that we need to accept and move on. We need to learn how to establish relationship despite having differences. In our country, there are couples who have mastered the art of living under one roof while they are constantly at odds with each other.

What I am talking here is about a working partnership with Trump administration. Both the countries can work together to steer their economies to attain desired goals. In this uncertain period, this marriage of convenience is the Trump card!


From → Analysis

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