Obama moves to suspend trade privileges with Bangladesh

President Obama has announced the suspension of ‘trade privileges’ for Bangladesh following the recent tragedies in the garment industry, notably at Rana Plaza and Tarzeen Fashions, where over 1,300 workers have died in building collapses and fires.

Barack Obama Bangladesh

President Obama has announced the suspension of ‘trade privileges’ for Bangladesh following the recent tragedies in the garment industry, notably at Rana Plaza and Tarzeen Fashions, where over 1,300 workers have died in building collapses and fires.

The Obama administration also cited mounting reports of violations of health and safety and employment rights in the country’s garment industry.

US trade experts said the administration’s decision would be a ‘substantial blow’ to Bangladesh’s reputation and was likely to put pressure on its government to move quickly to improve factory safety and end widespread violations of workers’ rights. Obama’s officials said they have offered Bangladesh a ‘road map’ for steps it needed to take to have trade privileges restored.

Obama said he was suspending the privileges, effective in 60 days, because Bangladesh was “not taking steps to afford internationally recognised rights to workers in that country”.

US unions have pressed Obama to take this step, saying the US needed to go beyond ‘stern words’ and take strong action to advise to the Bangladeshi government that far more needs to be done to ensure factory safety.

“The U.S. decision sends a very strong signal to the government of Bangladesh that they have to do things differently, that there’s a consequence to the way they’ve been operating,” said Michael H. Posner, a former assistant secretary of state of human and labour rights in the Obama administration.

The suspension will revoke the breaks on tariffs that the US gives Bangladesh under the Generalized System of Preferences, a World Trade Organization programme that seeks to promote economic growth.

Bangladesh fought to prevent the suspension, worried about the signal it sends to its own citizens and to global investors. However, some trade experts said the suspension is symbolic because it will affect less than 1 per cent of America’s $4.9 billion in annual imports from Bangladesh and excludes garments as they do not have US duty free status.

The Obama decision could influence the European Union, which is also considering suspend Bangladesh’s trade preferences. Action by the EU would have much greater impact because Europe’s duty free privileges include Bangladeshi apparel and Europe buys 60 percent of that country’s garment exports.

The damage Bangladesh’s other industries will face from the suspension is expected to pressure the country’s garment industry to make the changes unions are demanding an ending to government harassment of union organisers and giving more employment rights to workers in the country’s special export ‘manufacturing zones’.

The Obama administration’s move was in response to an official complaint filed by the AFL-CIO in 2007, when US unions cited numerous factory fires, a 2005 factory collapse which killed 64 workers as well as extensive efforts by Bangladeshi garment manufacturers to suppress union organising.

The fire last November at the Tazreen factory and the collapse of the Rana Plaza site in April is believed to have pushed the Obama administration into acting.

The AFL-CIO and the Obama administration also expressed concern about the treatment of union organisers in Bangladesh. In April 2012, Aminul Islam, a union organiser, was found dead, his body showing signs of torture. Bangladeshi news media reported that government security forces ‘might have had a hand in his death’.

The President of the AFL-CIO, Rich Trumka, welcomed the decision, saying:

“The decision to suspend trade benefits sends an important message to our trading partners. Countries that benefit from preferential trade programs must comply with their terms. Countries that tolerate dangerous and even deadly working conditions and deny basic workers’ rights, especially the right to freedom of association, will risk losing preferential access to the U.S. market.

“The suspension of GSP benefits, together with the binding commitment made by more than 50 brands to improve fire and building safety in factories, are important steps to improving dangerous working conditions. The global workplace cannot be a deathtrap for poor workers producing products for the global economy”.

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