The simple definition of Foreign Direct Investment (FDI) is when a company or a State has an ownership stake in an overseas project or enterprise based on a direct investment; a Treaty/Trade Agreement on FDI gives easy access for the investors to enter into the market. A Trade Agreement and/or a Bilateral Treaty on Foreign Direct Investment can create economic and social development; Vietnam is one the biggest trading partners of the European Union and they have successfully signed an agreement titled ‘EU-Vietnam Trade Agreement and Investment Protection Agreement’, which not only cemented their trading partnership but also opened a new window for socio-economic development for the concerned parties. Bangladesh on the other hand, being one of the largest trading partners of the EU, does not have any trade agreement with them yet. In this article, I have attempted to discuss how Bangladesh can benefit from a Bilateral Treaty on FDI with the EU. Bangladesh and the EU have been incredibly maintaining the trade relationship in several sectors of business, most importantly in the garments industry. The Foreign Direct Investment Treaty between these two parties can greatly improve the existing business relationships.

In 2020, Bangladesh was the EU’s34^th largest trading partner in goods moreover from 2017 to 2020, the EU’s importsfrom Bangladesh reached on average 14.8 billion Euros per year and that is a representation of half of Bangladesh’s total exports. Bangladesh as a least developing county enjoys benefits from the EU’s Generalised Scheme of Preferences, under the Everything But Arms (EBA) arrangement, Bangladesh’s all exportproducts have duty-free, quota-free access to the EU, except arms and ammunition; the benefits are not only limited to free access to the EU market, under the EBA agreement Bangladesh can use ingredients of other beneficiaries from the samegroup she belongs and use it to a product to export to EU; for example, if Bangladesh uses any materials which originated from Bhutan(it belongs to the same group of Bangladesh) and later Bangladesh used those Bhutani materials and processed those products in Bangladesh then thoseproducts will be considered as Bangladeshi originated. According to United Nations General Assembly, Bangladesh is expected to graduate from the status of the Least Developed Country in 2026 and an alarming impact of graduation from the least developed country status is an increase intariffs, EU is one of the largest trading partners of Bangladesh, graduation from the LDC status will risk Bangladesh to fall under the category where GSPis not allowed. Withdrawn of GSP, will cost Bangladesh to pay a hefty tariff on competitive products. A vibrant trade relationship between the EU and Bangladesh hasnever been a scarce idea and if they sign a Bilateral Treaty, Bangladesh will be positively impacted. The impression of the EU’s Biliteral Treaty with the other Least developed countries have been quite noteworthy, for example, the condition of keeping the environment safe while trading has been a significant priority in such agreements, terms agreed upon on ‘business visitors and intra’ which generally means that if a company wants to hire a Bangladeshi employee for the EU based establishments, they should have the right to do so; such opportunities can help to reduce unemployment issues. Althoughthe agreementwould be signed based on the interests ofboth parties however the abovementioned conditions can be very impactful for the Bangladeshi corporate industry and for the betterment of the environmental conditions. Generally, foreign investors can be attracted to invest in Bangladesh for many reasons for example, a well-managed Human Resources Department is a significant aspect to attractinvestors as it will provide a transcendent platform to access accurate information, well-trained employees, and reliable and quality service from the concerned organizations. In addition, foreign direct investment is expected to bring more capital to the country. Nonetheless, in my opinion, one of the significant prospects of this agreement can be the transfer of technology. If both parties agree, the transfer of technology agreement does promote economic development by allowing a commercial platform for the innovative technologies, it does protect intellectual properties provided both parties agree to include ‘Intellectual Property Rights’ (hereafter IPR) clauses in the Agreement; IPR is a right granted by the Government to the investors or creatorwhich exclude others from using that concerned technology or product. The parties may sign for anti-competitive policies to protect their national companies besides this, the access for the foreign investors in the public companies can also be addressed in this Treaty agreement. Albeit, having more EU investment in Bangladesh will enhance the economic growth and the agreement will allow the Bangladeshi enterprises a window to invest in the EU market as well. Such opportunities will allow Bangladeshi businesses to create an impression in foreign markets which can earn Bangladesh a lot of goodwill globally.

It is noteworthy, how the EU will treat the Bangladeshi enterprises while entering into the EU territory as the EU has its own complex regulations to screen the Foreign Direct Investments. Whether the Bangladesh products will go through such screening or whether they will mend new regulations, will depend on the Treaty Agreement of EU and Bangladesh solely.

From an observation of the common EU policy with respect to Foreign Direct Investment with other countries, one can conclude that the protection of the environment, labor rights, and human rights have always been considered; therefore, it is expected that a specific Treaty focusing on the EU and Bangladesh trade might safeguard the human rights and environmental damages in Bangladesh more effectively. Environmental governance through FDI has shifted from a marginal to a central position, environmental protection is one of the EU’s core values in signing an Investment Treaty Agreement. The investors and the domestic enterprises of Bangladesh might become more accountable in regard to these significant issues. Since soon Bangladesh is going to graduate from the least developed country status, a Trade Agreement or a Treaty Agreement with the EU will greatly benefit Bangladesh.

* The contributor is an LLM student and a Research Assistant of Dr.Rumana Islam, Commissioner, BSEC