The US yesterday said Bangladesh did not make sufficient progress in improving labour standards to justify revival of duty-free trade benefits.
Eric Biel, acting associate deputy undersecretary for international affairs at the US labour department, said, "Late last month, the US government conveyed to the government of Bangladesh its conclusion that Bangladesh had not made sufficient progress to date under the Action Plan to warrant reinstatement of GSP benefits."
He was speaking at a Senate Committee on Foreign Relations hearing styled “Prospects for Democratic Reconciliation and Workers' Rights in Bangladesh” yesterday.
In June last year, the US suspended Bangladesh's trade benefits under the Generalised System of Preferences (GSP), citing Bangladesh's failure in ensuring internationally-recognised worker rights.
Following the suspension, Washington laid out an action plan to improve labour, fire and building standards, remove obstacles to workers' freedom of association and collective bargaining and reform labour laws to help the country win back the GSP.
Biel admitted that there were indications of progress in some areas of the action plan.
"However, as has been conveyed with specificity to the government of Bangladesh, a great deal remains to be done to implement some of the most important elements of the Action Plan."
He said the plans for a larger, well-trained force of labour and fire and building safety inspectors were still in their initial stages, and the number of inspectors hired to date was relatively small.
The US in cooperation with international partners needs to continue "to hold the government of Bangladesh's feet to the fire", he added.
"Labour law amendments enacted in July 2013 don't address the concerns raised in the Action Plan, including severe restrictions on collective bargaining, in particular at the industry and sector levels."
The labour department official added the US would see whether the recently approved more than 100 trade unions led to actual results on the ground, as trade unions in the past did not function properly.
Although Bangladesh used to export less than 1 percent of its $5 billion a year under the GSP to the US market before the suspension, the impact of the withdrawal might be significant, as some other countries in the European Union, where the country enjoys duty waiver, might be influenced by the US decision.
Speaking at the hearing, Nisha Desai Biswal, assistant secretary of state for South and Central Asian Affairs at the state department, said: "We will continue to push for urgent reforms to improve worker rights and worker safety in Bangladesh."
Lewis Karesh, assistant US Trade Representative for Labour Office, said the US intended to conduct the next review in May this year.
He said a Working Group on GSP/Labour Affairs would be set up under the Trade and Investment Cooperation Forum Agreement (Ticfa) to provide a formal mechanism to the two countries to address labour concerns.
Senator Robert Menendez, chairman of the Senate Foreign Relations Committee, who presided over the hearing, said, "Any progress we make on labour issues is taking place in a very tenuous political environment."
Scott Nova of US-based Worker Rights Consortium said the quality of inspection mattered as garment factories that were hit hard by tragedies in the past had all been inspected. "Even Walmart had inspected Tazreen Fashions a few times."
The issue of Grameen Bank also came up in the hearing.
Democratic Senator Dick Durbin took the government of Prime Minister Sheikh Hasina to task for pushing Nobel peace laureate Prof Muhammad Yunus out as managing director of the Grameen Bank.
Durbin described it as a "crass political move to punish him in some way and sadly to punish millions of people who depend on that bank to survive."
Nisha Biswal echoed that sentiment, saying the bank's mission in helping poor women and families was under threat. "That is a deep shame and travesty."
Durbin wanted to know what the US government particularly did in protecting the rights of 84 lakh members and borrowers of the microfinance bank.
In response, Biswal said her government continued to stand by Grameen Bank, and had raised the issue with the Bangladesh government whenever it got opportunities.
Ellen Tauscher, chairman of Alliance for Bangladesh Worker Safety, and Kalpona Akter, executive director of Bangladesh Centre for Worker Solidarity, also testified.