The European Union has warned that it would take trade action against Bangladesh through its generalised system of preferences that the country gets on the EU market if the
country failed to ensure workers’ safety in factories.
The EU issued the threat on Tuesday, following the April 24 collapse of a building that housed five garment factories, killing more than 400 workers at Savar.
‘As Bangladesh’s largest trade partner, the European Union is very concerned about the labour conditions, including health and safety provisions, established for workers in factories across the country,’ the 27-nation bloc said in a statement issued by EU foreign policy chief Catherine Ashton and trade commissioner Karel de Gucht.
‘The EU is presently considering appropriate action, including through the Generalised System of Preferences — through which Bangladesh currently receives duty-free and quota-free access to the EU market under the “Everything But Arms” scheme – in order to incentivise responsible management of supply chains involving developing countries,’ it said.
It said that sheer scale of the disaster at Savar and the alleged criminality around the building’s construction was becoming clear to the world.
The Savar tragedy was all the more shocking as it followed textile factory fires in Bangladesh in recent months which have killed more than a hundred workers, it said.
‘In light of all these events, the European Union calls upon the Bangladeshi authorities to act immediately to ensure that factories across the country comply with international labour standards including International Labour Organisation conventions,’ it said.
The EU is Bangladesh’s top trading partner, accounting around 60 per cent of the country’s exports and if it were outside the GSP, it would face normal import duties, which are 12 per cent for many clothing items ranging from men’s jackets to women’s blouses.
European Commission officials, however, acknowledged a suspension of GSP for Bangladesh was unlikely, reports Washington Post.
But they hoped the threat of such a move would shock Bangladeshi authorities and European companies doing business there into action.
‘We will put a fire under their feet a little bit,’ said one commission official.
If Bangladesh were to lose its preferential trading status with Europe over conditions in its garment factories, it could face hundreds of millions of dollars in duties and limits on access to its largest trading partner, reports Reuters.
EU officials said on Wednesday they hoped the threat of action would be enough to make Bangladesh change its laws to retain the market. Any action would likely to take more than a year.
‘This is about firing a shot across the bows of Bangladesh to get them to engage on the issue,’ an EU official told Reuters. ‘We want to turn up the diplomatic heat on them and get them to sit down and discuss this with us.’
It was the second warning this year from the EC for the country, reports Reuters.
In January, the bloc called on Bangladesh to immediately act to ensure its factories comply with International Labour Organisation standards, after a garment factory fire killed six employees.
This followed a November fire at Tazreen factory that killed 112 workers and prompted US lawmakers to call for suspending their own GSP programme with Bangladesh, but no action was taken.
If the European Commission did suspend Bangladesh from the GSP scheme, it would not be the first time the bloc used access to trade preferences as leverage in dealing with countries.
The Commission suspended Myanmar from the scheme in 1997, prompted by concerns over forced labour. A positive report from the ILO last year resulted in the Commission proposing to readmit the country to GSP in September.
In 2007, the Commission ended GSP to Belarus after an ILO report found the country failed to respect basic rights allowing trade unions.
In the case of Bangladesh, the next possible step would be for the European Commission to launch an investigation into concerns over labour conditions in the country, after first consulting with European governments, a process that could take more than a year.
Only after this investigation the Commission would consider whether or not a country could be temporarily withdrawn from the GSP scheme. This decision would need to then be approved by EU member countries.
-With New Age input
