Bangladesh responded Friday to the White House’s move to halt its special trade status that suspends import tariffs on certain goods it sends to the U.S., calling it poorly timed in light of its efforts to improve textile-factory conditions. The Bangladeshi government has been under pressure to address factory conditions since the April 24 Rana Plaza building collapse, which killed more than 1,100 sweatshop workers, just the latest in a series of deadly factory accidents over the past few years.
On Thursday the White House issued a proclamation suspending Bangladesh’s duty-free trade arrangement under the so-called Generalized System of Preferences (GSM) “because it has not taken or is not taking steps to afford internationally recognized worker rights to workers in the country.”
The administration of Bangladesh Prime Minister Sheikh Hasina says the decision was poorly timed.
“It cannot be more shocking for the factory workers of Bangladesh that the decision to suspend GSP comes at a time when the Government of Bangladesh has taken concrete and visible measures to improve factory safety and protect workers' rights,” the country’s Foreign Affairs Ministry said Friday. “Bangladesh hopes that despite this setback the buyers would continue their business with their long-trusted partners and allow U.S.-Bangladesh trade to grow further.”
Brain Campbell, director of polocy and legal programs at the Washington D.C.-based International Labor Rights Forum, said his organization applauds the move by the White House.
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"The government of Bangladesh all but forced this decision failing to take any meaningful steps to end rampant abuses in the garment industry over the past five years," he said in a written statment released Thursday. "Instead, the government and garment industry spent lavishly on lobbying Washington for even more industry tax breaks."
While the move affects only a sliver of the impoverished country’s exports to its largest trading partner, it demonstrates resolve by the United States government to use that clout, even if largely symbolically, to press on the Hasina administration to speed up efforts to improve working conditions in the impoverished Southeast Asian country of 150 million.
The U.S. accounts for 23 percent of the country’s $20 billion export market, followed by Germany, the U.K. and Spain, according to the Observatory of Economic Activity at the Massachusetts Institute of Technology. Bangladesh’s largest nontextile export is seafood, representing about $470 million, or 2.4 percent of all exports. The country is hugely dependent on textile exports, which account for nearly 80 percent of the total.
The BBC reports that the suspension of the trade status will take effect in 60 days and will cover less than 1 percent of country’s exports to the U.S.
The White House decision comes two weeks after the U.S. Department of Labor offered $2.5 million worth of grants to improve workplace safety in the country’s burgeoning and vital textile industry. And on Tuesday the list of companies – mostly European – that have committed to a private-sector initiative to fund improved working conditions grew to 63.
The suspension of GSP status is likely temporary; the U.S. will reassess the situation later this year or early next.
"We're very hopeful that in six months the U.S. will review our GSP status and restore our privileges," Gowher Rizvi, a foreign policy adviser to Prime Minister Sheikh Hasina, told AFP.