Finalising a draft Foreign Investment Protection Agreement (FIPA) gets in a slow lane, deterring Canadian investment in Bangladesh and delaying a bilateral free-trade deal, officials say.
The Canadian High Commission in Dhaka has shared with Bangladesh a model of the proposed FIPA that Canada used to conclude with other countries, including some in South Asia.
However, finalising the draft of the deal did not see any progress so far. The industries secretary, while talking to the FE Thursday, could not confirm whether she received the FIPA draft or passed it forward.
Bangladesh High Commissioner to Canada Dr Khalilur Rahman in a recent letter to Industries Secretary Zakia Sultana requested expediting the spadework on the proposed FIPA in the interest of attracting Canadian investment.
He wrote that he had recently met Canadian Assistant Deputy Minister Paul Thoppil, in charge of the Asia-Pacific Bureau of Global Affairs Canada, and Ambassador Marie-Louise Hannan, Director General, South Asia Bureau.
Mr Thoppil told him that there was high interest among Canadian investors to invest in Bangladesh. "However, due to the absence of the Foreign Investment Protection Agreement (FIPA) between the two countries, the Canadian investors are discouraged from going to Bangladesh."
The minister of the North American country also linked the FIPA to the discussion on FTA/CEPA, of which there is "a new opportunity we are trying to tap through Canada's new Indo-Pacific Strategy declared recently".
Mr Rahman said he was also told that one of the biggest Canadian investors, Canadian Pension Fund, which invested heavily in India, has indicated to Global Affairs Canada that without FIPA with Bangladesh, it would be discouraged from considering the country for any new investment.
Despite sharing a presentation of Bangladesh Investment Development Authority (BIDA) promoting Bangladesh as a "lucrative investment destination with all the incentives and tax rebates provided currently in Bangladesh", the Global Affairs Canada underscored the need for signing FIPA to attract investment.
"I would like to request you to kindly expedite preparing the draft for FIPA and send the same to us and the Canadian High Commission in Dhaka for their consideration, inputs and comments as soon as possible," wrote Mr Rahman.
He also suggested holding an inter-ministerial meeting with participation from BIDA, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), and other relevant sectors to finalise the draft of the agreement.
Contacted, Industries Secretary Ms Sultana told the FE that, instead of focusing on treaty with any particular country, the government is now working to prepare Bilateral Investment Protection Treaty Act to give protection to overall foreign investment.
Bilateral trade between the two countries now stands close to US$3.0 billion. Bangladesh's exports to Canada in 2021 fetched $1.88 billion while imports from there were close to $1.0 billion.
