Amid great concern, confusion and disappointment over the Agreement on Reciprocal Trade (ART), signed hurriedly by the interim government led by Dr Mohammad Yunus just three days before the national election on February 12 this year, Dhaka signed a Memorandum of Understanding (MoU) with Washington on Thursday to import around $15 billion worth of energy products from the US over the next 15 years.
Dr Khalilur Rahman, who is accused of playing key roles in the interim government as National Security Adviser to conclude the controversial ART and now representing the incumbent BNP government as Foreign Minister, inked the MoU on behalf of Bangladesh, while Energy Secretary Chris Wright signed it on behalf of the US.
Not only energy, under the ART, Bangladesh has to buy approximately $3.5 billion worth of US farm products annually, including 700,000 tonnes of wheat and about 2.6 million tonnes of soybeans and soybean products valued at $1.25 billion, along with other agricultural products like cotton and corn.
Already serious protests and objections have been raised against the ART which eminent economists, researchers and trade bodies have termed as not only controversial but also against country's interests and sovereignty. Even politicians including Jamaat Ameer and leader of the opposition in the parliament Dr Shafiqur Rahman have been speaking against the ART.
The US trade deal has also raised questions among businesspeople and researchers as to whether it is feasible to import such a large volume of products from a single source. Importers have explained the whys and wherefores of why it is detrimental to country's interests, as it shrinks opportunities to buy these farm products from other countries at competitive prices and within shorter timeframes, considering the long distance between Bangladesh and the US.
Additionally, recently, Biman Bangladesh Airlines signed a deal with US aircraft manufacturing giant Boeing to purchase 14 aircraft worth $3.7 billion, marking the largest fleet expansion in the history of our national carrier, though the first aircraft is scheduled for delivery by 2031, while the rest are expected to arrive over the following five years.
Coming back to energy imports from the US, the MoU is considered important for our energy security by providing a reliable supply source. But questions are being raised that the MoU has tied the hands of Bangladesh to US energy markets, narrowing the flexibility to purchase cheaper spot-market alternatives from other nations. Most importantly, it restricts our ability to trade with US-sanctioned countries from where Bangladesh could obtain low-priced energy.
At present, Bangladesh purchases nearly all of its crude and refined oil from the Middle East, especially from Saudi Arabia and the United Arab Emirates. Qatar and Oman mostly supply us with LNG under long-term contracts. Now Bangladesh has to buy these energy items, including LNG, LPG and other petroleum products, from the US within the constraints of export pricing set by the US government.
The unilateral reciprocal trade agreement with the US was aimed at lowering US tariffs on Bangladeshi exports, mainly ready-made garments, to the American market. But the US tariff was reduced to 19 percent in exchange for zero-tariff access for thousands of US products and other trade and security concessions.
Evidently, Bangladesh will grant duty-free access to 7,132 American products, while 2,500 Bangladeshi products will receive the same privilege in the US market.
As a result, by granting zero-duty access to such a large number of US products, Bangladesh, according to an estimate, faces an annual import tax revenue loss of up to Tk 1,327 crore, which will surely stymie the implementation of country's development projects. The ART also imposes strict regulatory and digital policy conditions on our country and contains some provisions that align Bangladesh with US foreign policy and security measures, undermining Bangladesh's historical stance of strategic non-alignment.
This is why the ART has drawn mounting criticism from politicians, economists, stakeholders and businessmen in particular, and from common people in general. This has made the country's citizens increasingly restive, prompting the government to announce a review into the agreement.
The stakeholders hope that the government will bring the issue to parliament for detailed discussion and take necessary measures to amend it by shrugging off any sort of undue external pressure.
