US embassy cable - 05DHAKA2799

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