It left out Bangladesh from the list of 122 nations for whom US President Barack Obama on July 29 reauthorised the generalised system of preferences — the US’s biggest scheme for the world’s poor nations.
The reason for the exclusion was Bangladesh’s failure to fulfil all of the 16 conditions the Obama administration had laid out when it revoked the privilege two years ago on grounds of poor workplace safety and labour rights.
The GSP programme promotes economic development by eliminating duties on up to 5,000 types of products when imported from the 122 countries on the list.
Garment, which accounts for 95 percent of Bangladesh’s exports to the US, is not one of the products covered by GSP, which means there would not be deeper material losses for the country for being left out.
But Sadiq Ahmed, vice-chairman of Policy Research Institute, a think-tank, says the GSP exclusion gives out the wrong image of Bangladesh: that the country has unsatisfactory garment worker regulations and implementation.
The protection of worker interest is not just a GSP issue; it is essential for modernising employment practices in Bangladesh in line with international good practices, he wrote in an article for The Daily Star recently.
KG Moazzem, additional research director of Centre for Policy Dialogue, said the exclusion from GSP would put exporters of non-traditional items in a disadvantaged position, as all their nearest competitors would be enjoying duty benefits.
The beneficiaries of the new scheme include South Asian nations such as India, Pakistan, Nepal, Sri Lanka, Bhutan and Afghanistan.
Furthermore, it would pour a damper on the country’s designs to expand its export basket and reduce its reliance on garment, as the US is a sizeable market on its own.
The sooner the country fulfils all the conditions, the better it is, and it is not only for gaining the GSP but also for ensuring rights for the workers, the economist added.
“I am not interested at all in taking any more initiatives to get back the GSP. We have fulfilled almost all conditions given by the US. We have nothing more to do,” Commerce Minister Tofail Ahmed told reporters yesterday.
There is no reason except a political one for not giving the privilege to Bangladesh, he said. “Even Pakistan, where the human rights are violated and the working condition is bad, was given the GSP.”
Among the major reforms the country carried out were the amendment of the labour law to allow full freedom of association by the workers and completion of inspection of 3,669 factories for structural, electrical and fire safety.
Although delayed, the labour and employment ministry hired additional 200 factory inspectors, as per the conditions set by the US.
It allowed registration of more than 350 trade unions and opened a publicly accessible database of the garment sector.
The government also arranged training programmes for industrial police as per the conditions.
Apart from taking steps in line with the conditions, the government also lobbied hard with the Obama administration for reinstatement of the trade privilege.
The country has however failed to formulate the rules for applying the amended labour law of 2013 and bring change in the law to allow full freedom of association for factory workers of the export processing zones.
The government also could not arrest the killer of labour leader Aminul Islam, who was tortured and brutally killed in Tangail in April 2012.
To date, the government only managed to seize assets of the suspected killer of the trade union organiser with the Bangladesh Centre for Workers Solidarity.
The US agreed to renew the privilege following requests from its businessmen, who said they were losing $2 million everyday due to the suspension of the programme.
The new scheme will last until 2017 and make trade benefits retroactive to July 31, 2013, when the whole system was put on pause.
The commerce minister in his reaction said it was unfortunate that Bangladesh has been included with Russia, which was also not given the GSP status.
Many countries don’t want the rise of Bangladesh, Ahmed said.
He went on to raise questions on the role of some trade union leaders who do not actually work in any factory but lobby with some international organisations and propagate against Bangladesh.
They are also responsible for not giving the GSP to Bangladesh, Ahmed said, while expressing hope that the US would reconsider its decision at the upcoming meeting of the Trade and Investment Cooperation Forum Agreement.
Bangladesh exported $34.7 million under GSP in 2012. The top GSP imports from Bangladesh included tobacco, sports equipment, porcelain china and plastic products.
In fiscal 2014-15, Bangladesh exported goods worth $5.58 billion to the US, with 95 percent of them being garment products, which were subjected to 15.61 percent duty. A year earlier, the amount was $5.58 billion.
Source: The Daily Star
