DHAKA (AFP) - Bangladesh on Monday approved a trade agreement with the United States as it comes under intense pressure from Washington to improve labour rights following a series of factory disasters.

Bangladesh's Cabinet, led by Prime Minister Sheikh Hasina, agreed the Trade and Investment Cooperation Framework Agreement (Ticfa) to be signed with the US, Cabinet secretary Musharraf Hossain Bhuiyan said.

The deal will lead to stronger trade and investment ties between the two countries on the back of growing Bangladeshi garment exports to the US, he said.

The deal will also "ensure protection of intellectual property, curb corruption and ensure labour rights", he told reporters.

Bangladeshi trade officials have said Washington proposed the deal several years ago, but Dhaka resisted signing the accord because of concerns it could lead to scrutiny of the country's poor labour and intellectual property laws.

Dhaka's position reversed after it came under intense pressure, including from Western governments, to improve working conditions in the country's 4,500 garment factories following a series of industrial disasters that killed some 1,250 people.

A spokesman for the US embassy in Dhaka welcomed Monday's decision saying "we look forward to further discussion so that the agreement can be signed in the near future".

Two-way goods trade between the countries totalled US$5.4 billion (S$6.7 billion) in 2012, according to the Office of the United States Trade Representative website.

Last week, the US said it would soon decide whether to suspend Bangladesh from a duty-free accord as it urged Dhaka to take action to improve labour conditions.

President Barack Obama's administration in January launched a review on whether to keep Bangladesh in the Generalised System of Preferences, or GSP, which provides duty-free access for thousands of goods.

The review was under way when Rana Plaza, a nine-story garment factory complex on the outskirts of Dhaka, crumbled on April 24 and killed 1,129 people.

Mr Bhuiyan, the Cabinet secretary, said the approval of Ticfa was not linked to the GSP, but he said signing the deal could "eventually positively impact" on the US decision on the duty-free accord to Bangladesh.