A golden opportunity | The Daily Star
12:00 AM, October 18, 2007 / LAST MODIFIED: 12:00 AM, October 18, 2007

A golden opportunity

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BANGLADESH has had a long struggle with gaining duty-free access to the United States for its garment exports. The Progressive Policy Institute in Washington, DC has documented how Bangladesh faces higher duties than the United Kingdom -- $496 million on just $3.3 billion in exports -- compared to the $430 million paid by the UK on $53.5 billion in exports.
Who is to blame us? Bangladesh is still an LDC that needs this access, and, amidst our economic woes, the rise of the garment industry has made for a sunny economic story. While in the earlier years Bangladesh relied heavily on agriculture for its growth and exports, the yearly floods have made his unsustainable. The manufacturing sector, and in particular the garments industry, soon took over as an unstoppable engine for growth. The industry is now a formidable earner of foreign exchange -- accounting for more than 75 per cent of the total -- and a provider of jobs to over two million women.
The majority of Bangladesh's garment exports is destined for the United States market. But our textiles and garments going into the US are slapped with duties ranging up to 20%. Without such duties, Bangladeshi garment exports would, of course, grow at a much faster rate, and the industry could potentially hire a million more workers, mostly women.
In a letter dated March 15, Shirin Akhter, president of Karmajibi Nari (Association of Working Women) wrote to the United States Trade Representative: "We strongly believe that the US [and other developed countries] should provide duty free and quota free market access for all products originating from LDCs…You may be aware that more than 75 per cent of export earnings of Bangladesh is contributed by the ready made garment sector. More than 2 million workers of this sector are women, whose livelihoods, along with their family members', are directly related with the export performance of this sector."
A few members of the United States Congress, to their credit, have stepped forward to respond to such calls. For example, Senators Max Baucus, John McCain, Diane Feinstein and Gordon Smith, as well as Representatives Joseph Crowley and Jim Kolbe, have tried repeatedly to pass laws to allow Bangladesh and other poor countries to export garments and other products free of duties.
But such measures have had no success due to pressure from American labour unions and garment and textile producers who have lobbied intensely to hold on to these duties.
The American textile and garment makers constitute a tiny, almost invisible, fraction of the US labour force, and the membership of US labour unions has declined over the years, but each group has enormous political clout.
A common argument of these groups has been that labour standards in Bangladesh and other poor countries are just too low to justify giving them duty free access for their garments or other manufactured products. They contend that if duties are eliminated, U.S. companies will shift production to Bangladesh, attracted by the low labour costs associated with poor working conditions.
In the Congress, Representative Jim McDermott, a Democrat from Washington, is about to introduce legislation once again to eliminate duties for the poorest countries, including for most of Bangladesh's garment exports.
This time, however, Bangladesh is required to make significant improvements in its labour standards and pay better wages to the workers in order to receive duty free access to the US As a first step, Bangladesh must pass laws that enshrine the five core labour rights as defined by the International Labour Organisation, as well as demonstrate that these laws are being enforced.
The core labour rights include: (i) freedom of association, (ii) the effective recognition of the right to collective bargaining, (iii) the elimination of all forms of compulsory or forced labour, (iv) the effective abolition of child labour, including the worst forms of child labour, and (v) the elimination of discrimination with respect to employment and occupation.
This may be a tall order for Bangladesh, but it is also a reasonable demand. It should be seen by the government and business owners as a strong incentive for improvement. For years, we have been asking for the elimination of US duties that penalise our strongest industry. There is now a golden opportunity to get what we want, but only if our government and corporate leaders step up to the challenge of improving labour conditions.
It is no secret that workers' rights in Bangladesh are continually threatened. In several instances, workers have been fired for trying to bargain for fair wages. There is wide documentation, both by local and international NGOs, of abusive behavior and poor conditions in factories.
The government's response has, thus far, been weak. Government officials have been largely oblivious to the issue of unfair wages, and penalties for abusive treatment of workers have been met with nominal fines that are not high enough to change behaviour.
There is rarely any prosecution of violators, and our judicial system is a quagmire as far as labour cases are concerned.
Progressive citizens should have high hopes that Bangladesh can do much better to safeguard the rights of its workers. The traditional response of our government officials and corporate leaders to Western demands for higher labour standards has been that Bangladesh's poverty situation prevents it from doing any better. It may be true that low labour standards are linked to poverty, but such a response is misguided.
Better enforcement of labour standards, such as the right of workers to bargain collectively, would in fact have a salutary effect on poverty. Workers will have the ability to demand better wages without fearing retaliation, and this will have an equalising effect on the income distribution, as well as poverty reduction. Better wages for a factory worker means better living standards for his family.
Our corporate leaders, not only the garment business owners, would be wrong to contend that they are not in a position to offer better wages and conditions. We have seen that, as many businesses have been successful over the years, more and more BMWs have also emerged on Dhaka's streets.
It behooves wealthy business owners, who often are owners of many houses and automobiles, to offer better conditions to the workers who are responsible for their success.
At the same time, however, the expectations of the U.S. policy makers must also be kept at a reasonable level. It would be a gargantuan, or possibly impossible, task for Bangladesh with its 150 million people to monitor and enforce First World labour conditions throughout its economy. It will need a lot of resources from the US government and other international donors in order to do so.
Congressman McDermott is generous in proposing that a portion of Bangladeshi garments should come in duty free. However, his proposal adds that further reduction of duties would be offered only when Bangladesh's labour standards resemble those of First World countries. This expectation is more than a little unrealistic, considering that some of the most developed countries are having difficulties maintaining these standards.
Instead, what the US Congress should do is offer a system of gradually reducing duties on exports from Bangladesh, as labour conditions demonstrably improve. The efforts of the US Congress, however, are a good start and should be welcomed by Bangladeshis.
The government and corporate leaders should take the cue and start working for better labour rights in order to get what they have desired for long in terms of market access to the US.

Shamarukh Mohiuddin is a freelance writer based in the United States.

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