EU warns of trade action
The European Union, the largest destination for the country's garment items, plans to take trade actions against Bangladesh, which the industry insiders think will have a negative impact on apparel exports.
The bloc of 27 countries is considering taking action to oblige Bangladesh to improve safety standards in factories as a way of preventing frequent accidents, following the death of more than 400 garment workers in the Rana Plaza collapse in Savar.
The EU has voiced concern over labour conditions, including health and safety provisions, established for workers in factories across the country.
“The EU is presently considering appropriate action, including through the Generalised System of Preferences (GSP) -- through which Bangladesh currently receives duty-free and quota-free access to the EU market under the 'Everything But Arms' scheme -- in order to incentivise responsible management of supply chains involving developing countries,” it said in a joint statement on April 30.
The EU is the destination for almost 60 percent of Bangladesh's apparel products. Bangladesh became its major apparel supplier for having duty-free and quota-free access under the GSP and the EBA scheme.
“The EU has sent a strong message through this statement,” said Mustafizur Rahman, executive director of the Centre for Policy Dialogue.
If the EU withdraws the GSP facilities on garment imports from Bangladesh, the exporters will have to pay 12.50 percent duty on apparel items. It will lead to the country's competitiveness waning, and a large number of workers will lose their jobs, he said.
And the “Made in Bangladesh” brand will suffer another blow worldwide, said Rahman.
He suggested taking action against non-compliant factories and a zero-tolerance approach by the BGMEA, a platform for garment makers, to ensure the safety and security of workers.
“The international buyers need to play their part as well. They should pay more so that the garment makers can improve factory standards and avoid sub-contractors,” Rahman said.
The EU decision may also influence Washington at a time when Bangladesh awaits a verdict from the US trade representative on the continuation of GSP facilities in the US.
In January, the European parliament adopted three separate resolutions, cautioning Bangladesh on the issue of fire safety after the Tazreen fire incident in November last year.
BGMEA President Atiqul Islam fears many of the country's 3.6 million garment workers may lose their jobs if the EU takes trade actions against Bangladesh.
“We are taking steps to improve fire and building safety to avoid a recurrence of such tragic incidents. In such a crucial time, the EU should also work with us to help overcome the crisis.”
Commerce Secretary Mahbub Ahmed said the EU wrote to the ministry after the Rana Plaza collapse, inquiring about the incident. The ministry sent its reply to the EU two days ago.
He said the ministry would send another letter to the EU today with more information on the Savar incident.
In Germany, nearly 30 western retailers, labour groups and non-governmental organisations plan to set up a clearing house that will collect information on factory inspection, according to The Wall Street Journal.
Wal-Mart and JC Penney representatives were among the retailers, according to a Bloomberg report.
The talks, organised by Germany's international cooperation service known as GIZ, were aimed at winning support from companies, labour unions and non-governmental groups for Bangladesh's national action plan and for supplier assessments of fire and building risk.
A document on the talks will be published on May 15.