Duty cuts for RMG exports not in sight
The visiting US delegation yesterday declined the country's request for duty reduction on garment items in the inaugural Ticfa talks, saying the issue is in the hands of the World Trade Organisation.
Michael J Delaney, assistant US trade representative for South Asia, who is leading the five-member US delegation, said the matter of extending duty privileges to garment products from Bangladesh is part of the Doha Development Agenda of WTO.
But the Doha round of negotiations is yet to be completed, he said.
The US diplomat went on to insist that garment items from Bangladesh are not subjected to any discriminatory duty vis-à-vis China's, the largest apparel manufacturer, or other competitors.
“Bangladesh and China are afforded identical tariff structure to the US market under the most favoured nation status,” he said.
But, in practice, Bangladesh pays 15.62 percent duty on garment exports, whereas China pays only 3 percent.
Delaney's comments came at the press briefing following the seven hour-long opening meeting of the Trade and Investment Cooperation Forum Agreement (Ticfa).
“The meeting has been very productive, pragmatic. Every stakeholder came with problem-solving attitude. It's a great start,” he said.
The American trade negotiator also touched upon the progress made by the country with regards to the action plan for winning back Generalised System of Preferences status from the US, suspended on June 27 last year on grounds of unacceptable standards of labour rights and workplace safety.
“In the meeting we tried to locate where we are now in the action plan. We believe that there has been a lot of progress in a number of areas, but considerable work still needs to be done for regaining the GSP status.”
Delaney highlighted two areas where the country needs to act fast -- implementation of the amended labour laws and completion of factory inspections.
At the press conference, Commerce Secretary Mahbub Ahmed, who led Bangladesh in the forum, said some Sub-Saharan and Caribbean nations receive lower duty benefits from the US on grounds of being “vulnerable countries”.
“Bangladesh is also in a vulnerable position for climate change, so we have also sought lower duty from the US,” he said, adding that the US agreed to look into the matter.
At the meeting, the two sides also discussed ways to boost US investment in Bangladesh, which has been on a decline over the last few years, Ahmed said.
Dan W Mozena, US ambassador to Bangladesh, who was present in the talks, ruled out any political tension between the two countries.
“The bilateral relation is becoming stronger, broader, deeper,” he said, while citing the security dialogue held last week as a case in point.
Meanwhile at the meeting, the US side basically expressed concern on two labour issues -- the continued hostility towards trade unions and failure to fully implement the amended labour laws almost one year on.
Meeting sources said the US side alleged that the Bangladesh Garment Manufacturers and Exporters Association has been reluctant to take any action against its members who engage in anti-union activity.
While the government has made progress regarding registration of new trade union bodies, it still lacks the institutional capacity and political will to protect them, they said.
Subsequently, this has had an unsettling effect on labour organisation in the country, with many workers now fearing for their jobs if they join a union and union organisers fearing for their own safety.
They also called the government for immediate rigorous steps to end the suppression of new trade union organisations.
Regarding labour laws, the US delegation said that despite repeated calls the Bangladesh government has yet to extend them to the export processing zones, where the workers have no right to associate.
Ticfa is a platform signed between Bangladesh and the US to identify and solve trade disputes through holding dialogues at least once a year.
After a decade of negotiations between the two countries, the deal was inked on November 25 last year.
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