THE IMPORTANCE OF MOVING FORWARD WITH TIFA

C O N F I D E N T I A L DHAKA 002799

SIPDIS

DEPARTMENT PASS TO USTR
EB FOR PDAS SHAUN DONNELLY AND JEFFREY BELLER
COMMERCE FOR DAS STEPHEN JACOBS
USTR FOR ASHLEY WILLS AND BETSY STILLMAN

E.O. 12958: DECL: 06/15/2015
TAGS: ETRD ECON PGOV BG
SUBJECT: THE IMPORTANCE OF MOVING FORWARD WITH TIFA


Classified By: Ambassador Harry K. Thomas, reason para 1.4(d)


1. (C) In light of the upcoming TPSC meeting, I would like to
stress our compelling political, economic, and potentially
commercial reasons for securing a TIFA with Bangladesh.


2. (C) I understand that the key issue is whether to add
explicit references to bribery and corruption. As you know,
corruption is a major problem in Bangladesh, and we take it
very seriously because of its major threat to a wide range of
key USG interests, from security to commerce. Ironically,
TIFA is already poised to play a significant role in the
battle against corruption because TIFA would, for the first
time, give the USG a mechanism and a platform for publicly
and privately pursuing corruption and transparency problems
in Bangladesh. The BDG understands and accepts that aspect
of TIFA, but for political reasons it will not agree to the
explicit language on corruption that we'd prefer.


3. (C) There are other points worth considering:

A) TIFA would also be an excellent forum for addressing other
impediments to FDI, like poor governance, that are central to
our cross-cutting MPP strategic goals of counter-terrorism,
democratic practices, and economic growth and development.

B) If the USG changes the TIFA language at this late date, we
expose ourselves to Bangladeshi allegations of double
standards and bad faith because: 1) the BDG has older TIFA
texts without the new language; 2) we had preliminary
agreement on the current draft, and 3) the TIFA ball has been
in the USG, not BDG, court for almost a year because of USG
concerns about how the EPZ labor standards/GSP issue would
play out. I know there are fair rejoinders to all three
points, but the political reality here would be very
different.

C) Because the TIFA negotiation with Bangladesh has been
underway for so long, and perhaps because it was USG delay at
the end that carried it over into an era of new standards on
corruption language, I would hope that we could "grandfather"
the Bangladesh draft. I believe we have sufficient grounds
to defend such an action and thereby prevent its becoming a
negative precedent for future TIFA's.

D) USG credibility has recently taken some serious shots in
the Muslim world, including Bangladesh. Pulling the plug on
TIFA for what Bangladeshis would see as ambiguous reasons at
best would bolster the view that the U.S. is no longer
interested in doing routine business with the Muslim world.


4. (C) We have important strategic reasons for helping
Bangladesh succeed, politically and economically, and
approving the Bangladesh TIFA would be a significant step in
that direction. Commercially, Bangladesh is a nation of 145
million persons, including eight million with annual incomes
of USD 10,000 or more. Despite its many problems,
Bangladesh's economy is growing at annual 5-6 percent rates,
and it has several promising emerging sectors of growing
interest to Middle Eastern, European, Asian, and American
investors.


5. (C) Therefore, I strongly urge policy-makers not to
sacrifice this significant opportunity for positive
engagement and movement on key issues with a key country for
the sake of declaratory language that we cannot achieve, that
would effectively kill TIFA, and that would have no impact on
how TIFA was actually implemented or, I believe, viewed.

THOMAS