Govt won't scrap US trade deal, but review it, says PM's Adviser Zahed
Scrapping agreement may have implications for bilateral ties, he says
Highlights:
- Government will review the trade agreement with the United States instead of cancelling it immediately
- The deal allows cancellation with a 60-day notice and permits changes through mutual discussion
- The government is reviewing the agreement and may renegotiate parts considered harmful
- Zahed warned that cancellation could create complications in bilateral ties and tariffs
Zahed Ur Rahman, the prime minister's adviser on information and broadcasting, has expressed his support for reviewing the "US-Bangladesh Reciprocal Trade Agreement" rather than cancelling it, as concerns grow over provisions that are seen as potentially harmful to national interests.
Speaking at a regular press briefing on government activities at the Secretariat today (12 May), the adviser said the government intends to enter negotiations with the United States by utilising the review clause provided within the agreement.
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"We understand that this is a very strong agreement, and we also understand the context in which it was signed. We are also assessing what the impact would be if it were cancelled," he said, referring to discussions with Prime Minister Tarique Rahman.
Zahed added that cancelling the agreement could have implications for bilateral relations and reciprocal tariff arrangements, suggesting that a review and renegotiation would be a more practical option.
Scope for review and renegotiation
The adviser said the agreement includes provisions allowing either party to terminate it with 60 days' notice. He also noted that it contains clauses permitting amendments through mutual discussion.
"We can revisit the agreement. We can identify the areas that are more problematic and potentially harmful to the state, and conduct an initial review within the government. I hope we can proceed towards negotiations with the United States," he said.
Zahed reiterated that a structured review process would be undertaken before any decision on amendment or continuation.
Earlier, following a meeting with the United States Assistant Trade Representative for South and Central Asia, Brendan Lynch, Commerce Minister Khandaker Abdul Muktadir also said the agreement cannot be cancelled outright, but problematic provisions could be revised through discussion within the framework of the deal.
Background to agreement
The reciprocal trade agreement was signed on 9 February by the interim government led by Professor Muhammad Yunus, just days before the national election. The agreement has since drawn criticism from several economists and research organisations, including the Centre for Policy Dialogue, which have called for its cancellation, describing certain provisions as contrary to national interests.
Under this agreement, the trade benefits granted to Bangladesh are far outweighed by the concessions Bangladesh has offered in return. Bangladesh has assured imports of US cotton, wheat, and soybeans at higher prices, and it will also purchase Boeing aircraft.
Concerns over sovereignty and trade constraints
Analysts say the agreement contains several conditions that are even more alarming than the costly import commitments, as they could undermine the country's sovereignty and its ability to make independent decisions.
Debapriya Bhattacharya, a distinguished fellow at the CPD, pointed out that the treaty has already restricted Bangladesh's autonomy, citing the requirement for US permission to import oil from Russia.
Hafizur Rahman, former director general of the WTO Cell at the commerce ministry, warned that such provisions could discourage foreign investors, particularly those using Bangladesh as a low-cost production base for export markets.
Wider regulatory and investment implications
The agreement is also understood to include provisions affecting state-owned enterprises, subsidy structures and foreign investment conditions in sectors such as energy, telecommunications, transport and infrastructure. It reportedly requires Bangladesh to facilitate US investment under terms that are not less favourable than those offered to domestic investors.
It further contains clauses restricting subsidies that could be considered discriminatory against US goods and services, as well as conditions related to the procurement of nuclear materials, including reactor technology and enriched uranium, from countries deemed to affect US strategic interests.
The agreement also states that if Bangladesh is found to be in breach of its provisions, the United States may reinstate previously agreed tariff rates.
Officials said the government will now review the agreement internally before deciding whether to initiate formal negotiations for amendments.
