US to stop Bangla trade sops - Govt under pressure to act after factory collapse

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  • Published 28.06.13

June 27: The Obama administration will suspend trade privileges for Bangladesh over concerns about safety problems and labour rights violations in that country’s garment industry, according to administration officials.

The administration has come under intense pressure to suspend Bangladesh’s trade privileges after a factory building there collapsed in April, killing 1,129 workers, and after a factory fire killed 112 workers last November.

Officials with the US trade representative’s office declined to comment. Administration and Congressional officials said the official announcement would come later.

Labour unions and Democrats on Capitol Hill have been pressing the Obama administration to take this step. Bangladesh is allowed to export nearly 5,000 products duty-free to the US, which purchases about 25 per cent of the country’s $18 billion in annual apparel exports.

Bangladesh is among more than 125 countries that receives such breaks on US tariffs under the Generalised System of Preferences, a World Trade Organisation programme that is intended to promote economic growth around the globe.

In recent weeks, officials in the labour department have called for revoking Bangladesh’s special trade status, saying the US needs to take strong action. Labour officials have asserted that the garment industry has been dragging its feet in improving safety.

At the same time, some state department officials have pushed against suspending the trade privileges, saying it would damage diplomatic relations and undermine the economy or an already poor country.

The labour federation was upset about factory fires and a 2005 factory collapse in Bangladesh, as well as the extensive efforts by that country’s garment manufacturers to suppress labour unions.

Administration officials took that complaint with new seriousness after the Tazreen factory fire in November and after the Rana Plaza factory building collapsed two months ago. The Generalised System of Preferences covers only a small fraction of American trade with Bangladesh. Those preferences do not apply to the Bangladeshi garment industry.