Bribery, corruption key barriers to trade, investment in Bangladesh: US
The United States (US) has encountered various setbacks in government procurement, intellectual property protection, digital trade, investment and labour rights while conducting trade and investment in Bangladesh.
Besides, bribery and corruption appeared as key barriers to the advancement of trade and investment in Bangladesh, according to a latest report of the US on foreign trade barriers.
The office of the US Trade Representative (USTR) released the report – 2024 National Trade Estimate Report on Foreign Trade and Barriers – on 29 March and uploaded it on their website. The report addressed barriers to trade and investment that the US faces in 60 countries across the world.
In the Bangladesh chapter, the USTR noted the barriers in government procurement and some other issues. It said government procurement is primarily undertaken through public tenders under the Public Procurement Act of 2006 and conducted by the Central Procurement Technical Unit.
Bangladesh publicly subscribes to principles of international competitive bidding; however, charges of corruption are very common. Bangladesh launched a national electronic government procurement portal, but the US stakeholders have raised concerns about the use of outdated technical specifications, the structuring of specifications to favour preferred bidders, and a lack of overall transparency in public tenders.
According to the report, several US companies have claimed that their foreign competitors often use their local partners to influence the procurement process and to block awards to otherwise competitive US company bids.
The US companies have reported instances of alleged bid rigging in government tenders in Bangladesh. They also alleged the use of bribery, anticompetitive practices, and a lack of transparency in the bidding process, all of which disadvantage US companies bidding on government tenders.
The US appreciated the recent initiative to protect intellectual properties in Bangladesh. The report said Bangladesh has taken some steps in recent years to improve intellectual property (IP) protection through legislative reforms. However, the effectiveness of these changes remains uncertain. For example, counterfeit and pirated goods are readily available across Bangladesh.
The report highlighted barriers in the digital trade and expressed concerns over data protection laws and regulations governing social media and OTT platforms, which impede business development in Bangladesh.
The US and other international investors have raised concerns that the procedures and requirements for outbound transfers from Bangladesh remain cumbersome, lack transparency, and include significant delays for applications to repatriate profits, dividends, and other capital, with some companies waiting over a year for approvals.
Regarding labour rights, the report said the US suspended all of Bangladesh’s tariff benefits under the generalised system of preferences (GSP) programme due to its failure to meet statutory eligibility requirements related to worker rights, particularly with regard to acceptable conditions of work in the ready-made garment sector, including fire and building safety, and freedom of association. As of December 2023, Bangladesh remained ineligible for duty-free treatment under GSP.
Bribery and corruption have been described as major barriers to the advancement of trade and investment in Bangladesh. The report said corruption is a pervasive and long-standing problem in Bangladesh, and anti-corruption law is inadequately enforced.
Bribery and extortion in commercial dealings are common features of business despite the illegality of facilitation payments and gifts. There have also been efforts to water down anti-corruption safeguards of government procurement rules.
Some US companies have complained about long delays in obtaining approval of licenses and bids as Bangladeshi government officials seek bribes.
Also, there have been continuous proposals to curb the independence of the Anti-Corruption Commission (ACC), the main institutional anti-corruption watchdog.
The Sarkari Chakori Ain Bill requires the ACC to seek permission of the authorities concerned before arresting any government official and limits the ability of the ACC in investigating corruption allegations against government officials.