Bangladesh is likely to pay a hefty price for the recent Rana Plaza collapse as the US administration is under pressure from US senators for suspending trade
benefits for Bangladesh until it improves its working conditions.
US president Barack Obama is expected to decide the fate of Bangladesh’s Generalised System of Preferences facilities in the US market by the end of June whether to suspend Bangladesh from the GSP programme or to continue it.
GSP waives US import duties on thousands of goods from poor countries to spur economic development.
On June 6, a prominent Democratic senator pushed for suspending duty-free privileges to Bangladesh, saying it would send a strong signal that the United States is serious about protecting workers after hundreds died in the global garment industry’s worst accident, according to AP.
American retailers that source products from factories in Bangladesh also came under pressure at a Senate hearing to adopt common safety standards to prevent a repeat of the April 24 collapse of Rana Plaza in Dhaka that killed 1,127 people.
‘No one will want to wear a piece of clothing made in Bangladesh if it’s on the blood of workers,’ New Jersey Sen Robert Menendez, chairman of the Senate Foreign Relations Committee, told a hearing on labour conditions in Bangladesh.
Meanwhile, nine US senators have urged the Obama administration to suspend trade benefits for Bangladesh for the time being, international media reported on Tuesday.
The group of Democratic senators pushed for suspending the eligibility of Bangladesh for GSP and chalking out a roadmap with a timeline for its reinstatement based upon tangible improvements in worker safety and related labour law reforms.
Last year, the GSP programme spared Bangladesh about $2 million in duties on $35 million worth of tents, golf equipment, plates and other items it exported to the United States.
Bangladesh paid $732 million in duties on $4.9 billion worth of clothing exports to the United States.
Under the Generalised System of Preferences, Bangladesh can export nearly 5,000 products duty-free
to the US, its leading market.
Bangladesh is anxious to keep that benefit. While the GSP covers less than 1 per cent of Bangladesh’s nearly $5 billion in exports to the US and does not include the lucrative garment sector, it could deter
American companies from investing in Bangladesh and sway a decision by the European Union, which is also considering withdrawing GSP privileges.
The EU action could have a much bigger economic impact, as its duty-free privileges cover garments.
Bangladesh’s ambassador to the US, Akramul Qader, who attended the hearing but did not testify, defended the government’s record, saying it had improved worker rights and increased the minimum wage.
Authorities have closed 20 unsafe factories since the Rana Plaza disaster, he said. ‘We are trying our best,’ Qader said.
The AFL-CIO filed the petition seeking withdrawal of GSP benefits in 2007, which was expedited late last year amid concern from US lawmakers over deteriorating labour rights and the April 2012 killing of prominent labour activist, Aminul Islam – a case that has not been solved.
‘Had there been a union representative on the ground at Rana Plaza, that tragedy would not have happened,’ top US diplomat for South Asia Robert Blake told the hearing.
Blake noted some progress by Bangladesh in improving labour rights, including the registration of 27 new trade unions since September 2012.
He said Bangladesh had given assurances its parliament would pass amendments to its labour law this month to address freedom of association and worker safety. But he added, ‘There’s a great deal of corruption and governance challenges that still need to be met.’
Eric Biel, the US Labour Department’s acting associate deputy undersecretary for international affairs, said there currently were less than 100 government inspectors in Bangladesh to monitor between 4,000 and 5,000 factories that employ some 4 million people, 80 per cent of them women.
Democratic lawmakers criticised US retailers for not joining the more than 40 mostly European companies that have adopted a five-year, legally binding contract that requires them to help pay for fire safety and building improvements in Bangladesh.
While the US companies PVH, Sean John and Abercrombie & Fitch have signed up for the accord, many other leading American brands, including the Gap, Walmart, Target, and JC Penney, have not.
-With New Age input
