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Cablegate: Bangladesh's Foreign Secretary Raises Trade And

VZCZCXRO6875
OO RUEHCI
DE RUEHKA #0468 1151151
ZNR UUUUU ZZH
O 241151Z APR 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6655
INFO RUEHLM/AMEMBASSY COLOMBO PRIORITY 8405
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2133
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 9638
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0603
RUEHCI/AMCONSUL KOLKATA PRIORITY 1252
RHHMUNA/USCINCPAC HONOLULU HI PRIORITY

UNCLAS DHAKA 000468

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR SCA/PB

E.O. 12958: N/A
TAGS: EAID ETRD PGOV PINR PREL BG
SUBJECT: BANGLADESH'S FOREIGN SECRETARY RAISES TRADE AND
DEVELOPMENT ISSUES


1. (SBU) During Ambassador Moriarty's introductory call on
4/24, Foreign Secretary Mohammad Touhid Hossain raised a
number of trade and development issues including the
Millenium Challenge Account and GSP. The Ambassador noted
that Bangladesh was receiving a lot of attention among senior
officials in Washington who recognize its importance and
underscored the importance of the GOB's holding national
elections by year's end. He stressed that Secretary Rice
understood the country was going through a critical year of
democratic transformation.

---
MCA
---

2. (SBU) Hossain began by expressing Bangladesh's interest in
the Millenium Challenge Account (MCA), which requires
developing countries to reach certain governance standards to
qualify for aid. He said efforts to meet those standards
would require cooperation from the U.S. Government and
Embassy Dhaka. The Ambassador said he looked forward to
working with the Government of Bangladesh (GOB), but
emphasized that significant progress was needed in several
areas if Bangladesh were to qualify for MCA, most importantly
democracy, economic reform and anti-corruption. He
acknowledged that the Caretaker Government (CTG) was making
progress with respect to combating corruption and returning
the country to democracy.

-------
EXPORTS
-------

3. (U) The Foreign Secretary said the continuation of trade
benefits under the Generalized System of Preferences was
"very important" to Bangladesh. He said the future health of
the textile industry depended on continuation of the
preferences. With about 2.5 million women working in the
sector, any major disruption would have grave social and
economic consequences for the country, he said. The
Ambassador responded that a U.S. Trade Representative
delegation had had good meetings during a visit to Bangladesh
earlier in April and was pleased with progress made on labor
conditions in the export processing zones. He said that
concerns remained over conditions in ready-made garment
factories outside the zones (which Hossain acknowledged
existed in smaller companies) and that an advocacy group in
Washington was criticizing labor conditions in shrimp farms
in Thailand and Bangladesh. Hossain said he hoped that
Congress would pass the New Partnership for Development Act,
which was designed to boost access to U.S. markets for
garments.

4. (SBU) Hossain noted that Bangladesh wished to swap more of
its PL480 food-aid debt for spending on local conservation
projects. To stress the importance of conservation work in
Bangladesh, he noted that the Sundarban mangrove forest in
the country's southwestern corner protected large swaths of
land from even more extensive damage from Cyclone Sidr in
November 2007. He said conservation funding could be used to
create additional forest protection for this cyclone-prone
country.

--------------------------------------------- --------
AMBASSADOR REITERATES SUPPORT FOR RETURN TO DEMOCRACY
--------------------------------------------- --------

5. (U) Ambassador Moriarty referred to remarks he made
earlier in the week to local media that he expected
Bangladesh to return to democracy this year and that he
believed the military supported and understood the need to do
so. Hossain said that Bangladeshis' desire to put such
democratic reform in place was even greater than that of
Americans, and he further stressed the importance of fighting
corruption, which he said traditionally had slowed economic
growth by 1.5 to 2 percentage points a year. In general, he
said, while the U.S. and Bangladesh may have some slight
differences over priorities, their basic principles were
quite close. He pledged to work closely with the Ambassador
to advance those principles.
Moriarty

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