The government yesterday criticised the scrapping of trade privileges by the United States as harsh and shocking.
Responding to the criticism that Bangladesh has not made “sufficient progress” in basic labour standards, the government insisted that it has taken concrete steps to improve worker safety and rights.
“While Bangladesh is absolutely respectful of a trading partner's choice of decisions, it expresses its deep concern that this harsh measure may bring in fresh obstacles in an otherwise flourishing bilateral trade,” the foreign ministry said in a statement.
US President Barack Obama suspended tariff benefits for Bangladesh for what he said was the nation's failure to protect its workers.
Before the trade action, Bangladesh was among 127 countries qualified for tariff-free privileges under Generalised System of Preferences (GSP), a 37-year-old scheme that eliminates duties on imports from those nations to aid their development.
“It cannot be more shocking for the factory workers of Bangladesh that the decision to suspend GSP comes at a time when the government of Bangladesh has taken concrete and visible measures to improve factory safety and protect workers' rights,” the foreign ministry said.
“Indeed a section of people, inside both Bangladesh and the USA, had long been campaigning to this effect.”
Although the GSP does not cover garments -- the nation's main export -- the loss of preferential trade came as an embarrassment for the government, which is desperate to encourage Western fashion retailers to stay put.
Dhaka listed a series of steps it has taken: labour law reforms, ILO-led tripartite agreement to implement time-bound decisions and formation of a ministerial panel to ensure compliance in garment factories.
These should “speak for the Bangladesh government's seriousness in the matter”, according to the statement.
Bangladesh believes that its partnership with the US is founded on “certain core values such as democracy, human rights, rule of law, women's empowerment, freedom of expression and social justice”.
“It enjoys an extensive partnership with the USA in multiple areas such as democratic institutions building, empowering grass roots people, protecting economically and socially vulnerable groups, countering terrorism, contribution to global peace, and most importantly, a lasting business-to-business connectivity,” the statement said.
Dhaka pledged to remain engaged with all its trading partners to share ideas and collectively address factory safety issues.
Despite the setback, the buyers would continue their business with their “long-trusted partners” and allow the US-Bangladesh trade to grow further.
In 2012, the total value of imports that entered the US duty-free under GSP was $19.9 billion, including $35 million from Bangladesh.
Bangladesh hopes that the US administration would soon bring back Bangladesh's GSP status, a benefit the least developed countries are supposed to receive in the developed countries as per the provisions of the World Trade Organisation.
Gowher Rizvi, foreign affairs adviser to the prime minister, said he was deeply disappointed by the GSP loss but he hoped the US would reverse the suspension order by the year-end.
"We're very hopeful that in six months the US will review our GSP status and restore our privileges," he said.
Now the government's first step will be to pass the amended labour law in parliament soon and take steps to upgrade worker safety and rights, Rizvi said.
The policy adviser linked the GSP suspension to bad publicity created by the Rana Plaza collapse and Tazreen fire about Bangladesh.
“I would not call it a failure -- certainly not a diplomatic one. It's a complex subject,” he said in an interview with BBC Radio.
“When a law is reformed, there will be a lot of pressure and conflicting demands. All demands should be rationalised, in such a way that all parties agree to the reforms,” he said.
“It took a lot of time.”
Also disappointed were garment makers who said the suspension decision would hurt the apparel sector indirectly although the garment is not covered by the GSP.
“We expect that the US government will reconsider its decision for Bangladesh as the least developed country,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.