‘US decision to suspend GSP illogical’

From businessmen to workers’ platforms, everyone has termed ‘illogical’ the US decision to revoke Bangladesh’s preferential trading status despite various government efforts to improve factory working conditions and labour rights.

Staff Correspondentbdnews24.com
Published : 28 June 2013, 01:05 PM
Updated : 28 June 2013, 01:09 PM
President Barack Obama suspended Bangladesh from a programme that provides tax breaks to developing countries in what is seen as a powerful warning shot to it about the need to improve safety conditions for garment workers.
The decision, however, will have little impact on multi-billion dollar ready-made garment export, they say.
The government has said the move was ‘unfortunate’ and hoped Washington would consider reviving the facility soon.
It came in the wake of last November’s fire at Tazreen Fashions Limited killing over 110 workers and April’s collapse of multi-storied Rana Plaza where over 1,100 people mostly RMG workers died.
Business leaders and workers’ fronts say they find no ‘clear and logical’ reason behind the move.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Atiqul Islam, shocked at the decision, said, “I can see no logical reason for this. We are not clear why it took such a decision.”
“US says we need to improve working conditions. We did that. The government has amended Labour Act. We are working on improving the workers’ lifestyle. We have informed them (US) about it through various media,” the top apparel body chief told bdnews24.com.
Knitwear units’ association BKMEA Vice President Mohammad Hatem said the decision was ‘unfair’.
“What they are saying about working conditions and labour standard is not right. We are working with the ILO (International Labour Organisation) to improve things,” he told bdnews24.com.
RMG workers’ bodies say the US decision will be of no help for workers although it aimed at pressing the government into implementing their rights.
They fear similar steps by the European Union would badly damage Bangladesh’s garment sector and hurt the industry’s 3.6 million workers mostly female.
Bangladesh Textile Garment Workers Federation President Mahbubur Rahman Ismail told bdnews24.com: “They [US] say this was done for the sake of the workers. But this will not help them.”
He said the US could have pressured Bangladesh to ensure compliance in garment factories, international standard salary and the right to form trade unions instead.
Mosharefa Mishu, chief of a RMG workers’ platform, found the decision to be against the interest of Bangladesh.
“It cannot be supported in any way,” he said.
Bangladesh Garment and Industrial Workers Federation chief Babul Akhter believes the US should have considered Bangladesh’s various efforts before taking the decision.
The government is upset with the ‘unfortunate’ move but hopes Washington would soon bring it back.
A media statement from the Foreign Ministry on Friday said Bangladesh is absolutely respectful of a trading partner’s choice of decisions and feared the “harsh measure” may create fresh obstacles in a flourishing bilateral trade.
Bangladesh hoped the US would soon bring back the GSP status, a benefit a least developed country is supposed to receive in the developed countries as per the provisions of the World Trade Organization.
‘GSP cut won’t affect export’
The Export Promotion Bureau (EPB), however, believes the GSP suspension will not affect exports.
Its Vice-Chairman Subhashish Basu told bdnews24.com Bangladesh’s apparels do not get GSP facility in the US market. The decision will not negatively impact the overall export scenario as 86 percent of the exports to the US consist of garments, he said.
The US is the single largest importer of Bangladesh's goods. According to the EPB, the total exports during 2011-12 fiscal were $24 billion. Exports to the US accounted for about 21 percent of the total, around $5.1 billion, of which apparel export was worth $4.53 billion.
According to the US Trade Representative, Bangladeshi businessmen earned $34.7 million by exporting tobacco, sports equipment, porcelain china and plastic products to the US and duties waived were to the tune of $2 million.
Now, with the GSP status temporarily gone, businessmen will have to pay export duties, resulting in a decline in profits.
Basu said export volume would not decrease as items which enjoyed the facility were capable of competing in the global market.
BGMEA President Islam believes the move will not tarnish Bangladesh’s image in the global arena.
“We might face pressure in elsewhere but nothing like waning export would occur,” he said.
BKMEA Vice-President Hatem also feels the same way. He said the US had only suspended the facility but not slapped an embargo on export.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) chief Kazi Akram Uddin Ahmed said RMG exports to US are a negligible portion of the total. “So the GSP suspension will not affect our garment exports directly,” he said.

File Photo

‘EU main concern’
Analysts say the US move does not directly affect Bangladesh’s $20 billion industry, second largest after China’s.
However, it will be a major concern if the move influences European Union in taking a similar decision.
FBCCI President Ahmed is worried that the US move might impact the EU and Canadian markets that account for a major share of Bangladesh’s RMG goods.
The 27-nation block is Bangladesh’s biggest importer. The EU has repeatedly threatened to revoke GSP facility unless Bangladesh improved its working conditions.
The EU buys more than $12 billion in Bangladeshi garments annually, roughly three-fifths of the country’s production.
AKM Zahirul Kaiyum Khan, member of a platform of plastic goods manufacturers and exporters, said the US did not import plastic-made goods in large quantities.
“We’ll run into trouble if other exporters go the same way,” he said.
Workers’ platforms fear the interests of nearly 3.6 million workers, mostly women, of the RMG sector will be hurt if other countries follow the US footstep.
“Our whole industry will be endangered if Europe also adopts similar policy. In that case, nearly 10 million people, directly or indirectly involved with this trade, will be harmed,” Garments Workers’ Unity Forum chief Mishu said.
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