Bangladesh Criticizes US Trade Privilege Suspension

Anjana Pasricha

June 28, 2013
NEW DELHI — Bangladesh has called a decision by the United States to suspend the country’s trade privileges, due to concerns about dangerous working conditions and labor rights, a harsh measure. The U.S. move comes after global attention turned to hazardous working conditions in Bangladesh’s thriving garment industry in the wake of the country’s worst industrial disaster.
   
Sanctions

Trade experts said the U.S. move to suspend Bangladesh’s duty free trade privileges sends a strong signal to the country that they have to do things differently. The change followed a year-long review of labor conditions in Bangladesh.  

Dhaka had fought to prevent the suspension, which comes after two major disasters in its thriving garment sector. Last November, a fire raged through a garment factory killing more than 100 people. In April, more than 1,100 people were buried under the rubble of a nine-story building.

Saftey concerns

The U.S. said these accidents highlight the serious shortcomings in worker rights and workplace safety standards in Bangladesh.

Dhaka’s foreign ministry said the “harsh” measure by Washington may bring new obstacles to an otherwise flourishing bilateral trade relationship.

Economist Mamun Rashid in Dhaka said the U.S. move will pressure the government to act faster to address global concerns on these issues. He said otherwise, Bangladesh’s reputation for business could be seriously damaged.

“Government has to accept the reality. Government possibly needs to do a review of the existing labor law accommodating more issues with regard to establishment of labor rights. The move has started, but this has yet to get momentum. We do not have much leeway or space, so we got to take it forward, said Rashid.

Bangladesh is being urged to ensure that its garment industry does not operate from shoddy buildings that are structurally unsound and are fire hazards. In recent months, the government has taken steps to tighten inspection of buildings and relocate those that are not safe.

Worker rights

Those fighting for workers rights also hope that the U.S. move will provide the trigger to address issues such as harassment of labor activists. Observers said this is meant to discourage formation of labor unions. Labor activist Kalpona Akter with the Bangladesh Center for Worker Solidarity said the legal right to form unions does not work on the ground.

“The government already started feeling the heat. Now it is a good opportunity for them to improve the condition[s]. One of them [is] to make these factories safe and second to let workers free to form unions," Akter explained. "The union right to organize, it is always there, but that is on board, but workers are not free to exercise.” 

Economic impact

The trade sanctions by Washington will not have much direct economic impact because the apparel sector - the country’s main export industry - does not have duty-free status in the U.S.

The deeper worry is whether such a move could influence other countries, particularly the European Union, to take similar steps. The EU, which does extend duty-free privileges to garments from Bangladesh, buys apparel worth $15 billion from the country.

Bangladesh’s foreign ministry has expressed hope that the U.S. will soon restore the country’s trade preferences and has urged Western buyers to continue their business with their “long trusted partners in the country.”

The garment industry employs nearly four million workers and is the main driver of Bangladesh’s economy. However, there are fears that the country’s failure to address global concerns on workers issues could drive buyers to other Asian countries such as Cambodia and Indonesia.