Strengthening commercial ties with Canada: Need for a whole-of-government approach

After assuming the charge of High Commissioner of Bangladesh in Canada in January 2021, one of my primary economic targets was to strengthen and expand the existing commercial relations between Bangladesh and Canada, including increasing bilateral trade volume as well as attracting more Canadian investment to Bangladesh, following the vision of the Honourable Prime Minister Sheikh Hasina by actively promoting and pursuing economic diplomacy. 

Today, Bangladesh's trade with Canada has reached its all-time high, with Bangladesh's exports to Canada reaching $2.02 billion and imports from Canada reaching $1.21 billion by the end of 2022 (data for 2023 has yet to be published).

However, our success in attracting Canadian investment remains below par despite its immense potential, primarily because of the absence of a Foreign Investment Protection Agreement (FIPA) with Canada. Discussions for concluding a FIPA began in 2012, yet from the Bangladesh side, we have not been able to come up with a draft FIPA for negotiations with the Canadian side. 

Despite my repeated requests to the Ministry of Industries and other relevant authorities in Dhaka, we have yet to receive a response to our several formal communications to date. The complete non-responsiveness to this important issue can question the sincerity, commitment, and professionalism of the concerned authorities in the country to attract Canadian investment to Bangladesh.

The urgency of concluding a FIPA with Canada now is greater than ever following the appointment of Canada's Indo-Pacific Trade Representative, based in Jakarta, Indonesia. From Jakarta, he will be working to strengthen and expand Canada's commercial relations with countries in the Indo-Pacific region, including Bangladesh. 

In early January 2024, I had a very productive one-on-one meeting with him just before he left Ottawa for Jakarta to take up his new assignment. 

Paul Thoppil categorically told me that concluding a FIPA is a prerequisite for attracting Canadian investment in Bangladesh. Moreover, he informed me that discussions regarding a free trade agreement (FTA) can only commence after the FIPA is finalised. 

It may be mentioned that our Commerce Ministry has been insisting on concluding an FTA with Canada, but they have never shown any interest in finalising a FIPA. The Joint Working Group (JWG), which was also established during my time as High Commissioner to strengthen commercial relations between Bangladesh and Canada, submitted recommendations in late 2022 to both governments. 

These recommendations were discussed during the last foreign office consultations held in Ottawa in late October 2023. The recommended areas identified by the JWG also include investments. 

Therefore, it is crucial to make sincere efforts to draft, negotiate, and conclude a FIPA with Canada as soon as possible for the implementation of the recommendations of the JWG, especially those related to investments, as well as for the commencement of the negotiation of a FTA as has been requested by the Ministry of Commerce.

Adding impetus to our cause, Mr Thoppil also informed me that he would lead a high-level trade and investment delegation comprising representatives from the Canadian government, private sector, and key financial institutions like the Canadian Pension Fund, Brookfield Corporation, Fairfax Financial, and Sun Life Assurance of Canada to Bangladesh in April 2024. 

It is critical to at least prepare a draft FIPA and share it with the Canadian side before the proposed trade and investment mission to Bangladesh led by Mr Paul Thoppil to give positive signals to Canadian investors regarding our intent to cater to their pre-requisite for Canadian investment in Bangladesh. 

Therefore, the relevant ministries and agencies in Dhaka, including the Ministry of Industries, Ministry of Commerce, Ministry of Foreign Affairs, Bangladesh Investment Development Authority (BIDA), and others, need to finalise a draft FIPA by organising inter-ministerial consultations so that the negotiations with the Canadian side can start at the earliest. 

The private sector, including the FBCCI as well as other business associations and stakeholders, should also press the government to draft, negotiate, and conclude FIPA at the earliest. 

Meanwhile, the Canadian High Commissioner in Bangladesh, while calling on the Finance Minister on 7 February  2024, also emphasised the importance of the FIPA to attract Canadian investment in Bangladesh and requested that he advise the concerned line ministries to expedite the process of concluding it from the Bangladesh side. 

Given the inordinate delay and urgency to conclude the FIPA, I feel that the Private Industry and Investment Adviser to the Prime Minister may take the lead and, in consultation with all concerned Ministries, can expedite concluding the FIPA at the earliest possible time.

It may be mentioned that the High Commission is also working with the Ontario Chamber of Commerce and other concerned business bodies and business promotion agencies in Canada, including the Asia-Pacific Foundation, to organise a business summit in Toronto in April/May 2024 to strengthen and expand our trade relationships as well as to attract Canadian investment. 

The mission has also kept the Ministry of Commerce, Ministry of Foreign Affairs, FBCCI, BIDA, BGMEA, BKMEA, and others informed about this business summit, which may include a customised trade fair.

Meanwhile, due to the tireless efforts and advocacy of the High Commission for the last three years, Canada has finally assured Bangladesh of continuing the preferential market access, i.e., the Least Developed Countries Tariff (LDCT), even after our graduation in 2026. 

The Department of Finance Canada is now working to bring necessary amendments to the legislation in this regard. This development speaks volumes about Canada's interest in fostering closer economic ties with Bangladesh. 

Moreover, its Indo-Pacific Strategy seeks to expand trade, investment, and supply chain resilience in the Asia-Pacific region. As Bangladesh is projected to be the 9th largest consumer market in the world by 2030, surpassing the UK and Germany, as well as having over 65 million Medium and Affluent Consumers (MAC) population, it can be a lucrative destination for Canadian investors. 

On top of that, the current evolving geostrategic context in South Asia vis-à-vis Canada makes our case for attracting Canadian investment more powerful. It is high time for Bangladesh to do the most essential by adopting a whole-of-government approach to strengthen and expand our commercial relationship with Canada.

Dr Khalilur Rahman is the High Commissioner of Bangladesh in Canada. He can be contacted at: [email protected]

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.