EU threatens to scrap trade benefits over labour rights

The European Union has threatened suspension of trade privileges for Bangladesh if the labour standards are not improved further.

The suspension would mean that Bangladesh would have to pay 12.5 percent duty for exports to the 28-nation bloc. At present, the country enjoys zero-duty access under the EU's Everything But Arms (EBA) scheme.

Three European Commission bodies in a joint letter to the Bangladesh embassy in Brussels said the country needed to implement the four recommendations made by the experts of the International Labour Organisation last year.

Bangladesh will need to demonstrate that it is taking concrete and lasting measures to ensure that labour rights are respected, according to the letter, which was forwarded to the commerce ministry last week by the embassy.

“This will be essential for Bangladesh to remain eligible for the EBA regime. Without such progress, our monitoring could eventually lead to the launch of a formal investigation, which could result in temporary withdrawal of preferences,” it said.

Contacted, Commerce Minister Tofail Ahmed said: “The labour unions in Bangladesh have been enjoying full freedom. We have improved the labour standards a lot.”

Ahmed will discuss the matter with the EU in the upcoming third round of Sustainability Compact meeting between the EU and Bangladesh in May.

Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association, said they are already in talks with a visiting EU team.

“We have progressed a lot in ensuring labour rights over the years. We are highlighting our progresses to the delegation. We have a daylong meeting with the team in Dhaka tomorrow,” Rahman said.

Under GSP (Generalised System of Preferences) regulation, beneficiaries are required to respect international principles of human rights and labour rights in order to continue to benefit from this preferential trade regime with the EU.

The ILO Committee of Experts in its latest publication in February expressed its concerns about the recent allegations of acts of violence and harassment against trade union.

“This is a very serious indication of deterioration of situation, which we do not consider lightly,” according to the letter. In addition, the EU continues to regularly receive reports of harassment, initialisations and repression of trade unions and workers wishing to unionise as well as restrictions on trade union activities and even arrest for activities such as holding trading seminar or strikes.

These reports seem to indicate a further decline in the respects of fundamental labour rights of workers, the letter said.

“It is of the utmost importance that Bangladesh addresses this situation with concrete and time bound actions in particular by implementing the recommendations of the ILO committee on the application of standards as a matter of urgency.”

The EU in the letter said it wants the government to make amendments to the 2013 Labour Act to address the issues pertaining to freedom of association and collective bargaining. It also called for full freedom of association for workers in the export processing zones, and allowing the workers' organisations to associate with their counterparts from outside the EPZs.

The EU also suggested immediate investigation into the acts of anti-union discrimination and reinstatement of the illegally dismissed. In 2015, Bangladesh was by far the largest exporter to the EU under the EBA scheme. The country accounted for 65.7 percent of the EBA exports.

Last fiscal year, Bangladesh's exports to the EU stood at $18.68 billion, which is 54.57 percent of the total exports in the 12-month period, according to data from the Export Promotion Bureau.