Dhaka needs to do more to restore trade preference to US market

The United States has said there is still important work to be done before the GSP trade privilege can be reinstated for Bangladesh though Dhaka claims it has fulfilled all conditions outlined in the 16-point action plan.

Visiting Assistant US Trade Representative (USTR) for South and Central Asia Michael J Delaney and US Ambassador in Dhaka Marcia Bernicat yesterday made it clear that Bangladesh is yet to fully implement the Action Plan's “To Do” list.

“There was an assessment by 'some' in Bangladesh that the action plan has already been fulfilled, but the fact is that our own tracking of the items in the plan indicates that more needs to be done,” said Delaney.

He said the US conducted intensive public reviews for six years and also engaged with Bangladesh.

The US suspended Generalised System of Preferences (GSP) trade benefits for Bangladesh in June 2013 after finding that Bangladesh was not fully meeting the eligibility criteria, particularly rights.

Ambassador Bernicat said, “Completing the GSP Action Plan is the right way forward and right thing to do, but there were some 'inherent international standards' in action plans that needed to be fulfilled.”

Delaney, who led the USTR delegation on its five-day visit to Bangladesh from September 19, said the delegation had meetings with leaders of businesses, the government and labour groups to prepare for the upcoming GSP review meeting in November.

The Action Plan was formulated after discussions with Bangladesh government to identify the needs, and it demonstrated “our commitment to partner with Bangladesh to address those issues,” he said at the EMK Center in Dhanmondi.

He, however, said the timeline for getting back the GSP depends on Bangladesh.

“There has been a concrete improvement regarding workers safety. However, there are other elements of the action plan that must be addressed such as freedom of association, greater transparency with respect to unfair labour practices, and union registration both outside and inside the EPZs.

“These are the areas where improvements must be made in order to fulfil the action plan.”

Delaney said the US-Bangladesh trade and investment significantly grew over the past few years, but the relations between the two countries also faced some challenges.

In this context, he mentioned the suspension of Bangladesh's trade benefits under the GSP programme.

“Some have suggested that the decision was somehow based on politics. On the contrary, it was a fact-based decision that followed a public, transparent, multi-year review of worker rights and worker safety in Bangladesh.”

The review included four public hearings and scores of public submissions by a wide range of stakeholders, including the Bangladesh government, labour groups in Bangladesh and the US, and others.

US officials met Bangladesh government high-ups frequently during the review to share specific issues of concern, to suggest ways to address those issues, and to offer technical assistance.

He encouraged all to review the 16-point GSP Action Plan that will help protect fundamental labour rights and health safety of Bangladeshi workers. “Everything in the Action Plan is important, achievable and transparent.”

Delaney said the US conducted three separate reviews of Bangladesh's action plan since June 2013, and these reviews recognised progress made on a number of the action items.

Citing an example, he said more than 2,000 RMG factories were inspected by the two private sector-led initiatives -- the Alliance and the Accord -- to address the most serious safety issues in those factories through remediation plans.

This is critical to help protect Bangladesh's workers from another catastrophic failure, like the tragic Rana Plaza building collapse. These are examples of progress on items under the Action Plan's “To Do” list, said Delaney.

“But there is still important work to be done. Inspections of remaining RMG factories, including many operated by subcontractors to RMG-exporting firms, still need to be conducted,” he said, adding the factories already inspected need to implement their corrective action plans.

“Much of the progress that has been made toward ensuring fire and building safety has been due to these initiatives' considerable efforts and investments. But their support is not without limits.”

The US official said they look forward to progress towards labour reform in the Export Processing Zones.

“Freedom of association in the EPZs is a very significant element of both the GSP Action Plan and Sustainability Compact. This is an issue on which we have been discussing with the government of Bangladesh for many years under the GSP programme.”

Efforts to harmonise the law in EPZs with international standards on freedom of association or collective bargaining will help achieve another GSP element, he said.

On registration of unions, the US official said they saw very good progress initially on union registration as an unprecedented number of unions get registered. But now things seem to be slowing in this area, with an increasing number of registrations being denied.

“We have also heard continuing concerns about the protection of unions from harassment.”

He called for addressing the allegations and ensuring unions' rights and responsibilities under the law.

“In addition, we seek transparency -- ways the government can share what it is doing with the interested actors.”

He said the goals of the GSP Action Plan and the Compact are important in their own right. “But we should also think more about expanding our economic relationship outside of the context of GSP.”

Terming Trade and Investment Cooperation Forum Agreement (Ticfa) an appropriate forum for discussions on trade issues, he said, “I hope we will be able to schedule another Ticfa meeting soon so that our two countries can grow their economic relationship in mutually respectful manner.”

Meanwhile, Commerce Minister Tofail Ahmed said the Ticfa that Bangladesh signed with the US in November 2013 would be pointless if duty privileges were not restored for Bangladesh.

“The Ticfa will be meaningless if GSP is not restored, as we have fulfilled the conditions laid down in the Bangladesh Action Plan,” the minister told reporters after a meeting with the visiting US delegation at the Secretariat.