Compliance key to market access

Bangladesh needs to fully comply with international labour standards and make gains in ensuring workers rights sustainable to retain market access to the European Union, a top diplomat said. 

"I think market access, compliance and sustainability go together. They are part of the same picture," said William Hanna, head of the EU delegation to Bangladesh.

"As long as things go well and we work through reforms, our market access will be there," he told The Daily Star in an interview recently.

He also said there are a number of issues that still need to be addressed as the EU wants to stay engaged with Bangladesh. "We are not in the business of taking sanctions."

Hanna called upon the Bangladesh government to improve labour standards and factory conditions further to be able to continue enjoying the benefits of generalised system of preferences of the EU.

"Market access can't go forward without sustainability. If the foundation for the success is solid you are not going to encounter problems."

Currently, the EU is Bangladesh's single largest export market: in fiscal 2013-14 the country's exports to the EU hit a record high at more than $16.4 billion. This accounts for more than 54 percent of Bangladesh's total exports.

Hanna said the duty-free market access under the GSP has been a tremendous opportunity for Bangladesh.

"The country has taken advantage of the market access and witnessed great success over the past few years."

Hanna has been in Bangladesh for three and a half years now, and since his arrival the country's exports to the EU went up 57 percent.

"It is an enormous amount. I don't think any developing country has leapt as much as Bangladesh. That shows that Bangladesh's workers and managers have got the right skills."

Besides, the quality of Bangladeshi products is good enough to access the market and create jobs, wealth and prosperity for the future, the outgoing diplomat said.

The GSP allows all products, except arms, to enter the EU market duty-free. "So, there is scope to broaden and diversify Bangladesh's exports to the EU," Hanna said.

He said the EU trade and labour commissioners will sit in Brussels later this year to review the progress of all stakeholders under the Sustainability Compact. "So the work has to continue."

In July last year, Bangladesh signed the time-bound agreement with the EU and the International Labour Organisation to improve labour, health and safety conditions for workers and to encourage responsible behaviour by businesses in the garment sector. Later, the US also joined in the Compact.

The ambassador said, as part of promises made under the Sustainability Compact, Bangladesh has progressed a lot, but more needs to be done. "It is not over yet. We have to keep working to ensure there is sustainability."

He also said: "All factories must be safe. It means better labour relations. It also means all workers should be allowed to associate freely and bargain collectively whether it is in factories inside or outside the export processing zones."

He said improving labour and factory conditions in Bangladesh is a long-term issue. "That is normal in any reform process: you make a start and you move ahead, and you will have to continue."

The diplomat was happy with the factory inspection results. "In the end, factory inspections have not shown a great number of factories are at structural risk. That is good news."

He also said a system aimed at flawless factory inspection should be ensured for the future so factories are properly inspected. "That is why it is important to recruit adequate number of inspectors."

He, however, urged the government to formulate regulations fast to implement the new labour law.

Hanna will leave Bangladesh later this month and will head the EU delegation to Ghana. 

He reflected on his time in Bangladesh. "The first thing I would like to say is that the people in this country are very warm, friendly, hard-working, resilient and entrepreneurial."

Hanna said bottlenecks in infrastructure and regulations need to be addressed for the country to really make spectacular inroads into poverty alleviation and higher level of economic growth.  

"The country has a growth potential, but needs infrastructure such as roads, bridges, ports and railways to be able to realise the potential."

The country is doing reasonably well, but to move to a higher level of poverty reduction and economic growth it would need to increase foreign direct investment, he said.

He said the EU is keen to increase its investment in Bangladesh, but the obstacles make it difficult for the foreign investors to invest here.

He also advises Bangladesh to diversify its products and markets. Greater regional integration has huge potential for the countries in the Saarc bloc.

"As Europeans we saw the benefit. We broke down the barriers between the countries and a lot of our growth over the last fifty years has come from the internal market."

The diplomat said Bangladesh's large young population can bring huge demographic dividend for the country.

"These young people are looking for a better future and that is a great force. So, providing opportunities to these people is very important."

On Bangladesh's current political situation, he said: "As a group, we continue to call for a dialogue. We think it is necessary and that is the way forward:

About the BNP's threat to launch tougher movement after Eid, he said: "Violence and confrontation is not the way forward. Dialogue is the way forward."

When asked about any possible solution, he said: "The answer has to come from Bangladesh."

fazlur.rahman@thedailystar.net