What does the US gain by not restoring the GSP facility? And what do we lose?
The debate about why Bangladesh should win GSP back and why the US should not be giving it has been going on for the last 27 months. As for your columnist, following tweets of United States Trade Representative (USTR) has become a disappointing habit, just because there's no good news in sight.
It started back in June 2013 when Bangladesh became ineligible to receive trade benefits under the GSP programme while exporting to the US. Even though GSP never included readymade garments, the $34.7 million worth of tobacco, sports equipment, porcelain china and plastic products that were being exported to the US suffered the blow. This added more damage to Bangladesh's image. USTR chief Michael Froman had then commented that there were some “serious shortcomings in workers' rights and workplace safety standards in Bangladesh.” Bangladesh was punished for letting Rana Plaza happen. Bangladesh was punished for overlooking rods jutting out from extremely distressed columns in that building and for not having strictly enforced closure of the structurally compromised building. Fair enough.
This year, so far Bangladesh has sprung up in more than one USTR discussion. In January 2015, a USTR-led interagency review concluded that while Bangladesh had made progress over the last year to address fire and building safety issues in RMG, further improvement is needed, which must include serious worker rights issues, before reinstatement of GSP could be considered. In July 2014, again an interagency review led by the Office of the USTR concluded that they were seeing “some improvements” while they still remained “concerned about the large number of factories that have yet to be inspected, the lack of progress on needed labour law reforms, and continuing reports of harassment of and violence against labour activists who are attempting to exercise their rights.” USTR also added that the government was behind schedule in carrying out many hundreds of critical safety inspections in garment factories, as well as in meeting its commitments to hire additional inspectors. In August 2015, the US renewed trade preferences for 122 nations around the world, but Bangladesh was excluded from the list. In that review, Froman said there was still “more work to do” and urged the government to accelerate its efforts “to ensure workers' rights and to take measures to address continuing reports of harassment of and violence against labour activists who were attempting to exercise their rights.”
Finally four days ago, when a delegation from the Office of USTR held a meeting with a home team in Dhaka, there were unofficial reports on Washington apparently not being happy with labour standards at our end. While Bangladesh claims that it has fulfilled most of the 16 conditions under an action plan for improving working conditions and workers' rights, the US team, led by Michael J Delaney, assistant representatives (at USTR) for South and Central Asia, probably will still want to know the steps taken by the government before they finally review the GSP status soon. Unofficially, following the meeting, the Bangladesh side may have been concerned about the US “shifting goalpost”. While Bangladesh has also recently firmed up the Rules of Implementation of the Bangladesh Labour Law 2013; while 235 factory inspectors, 218 new fire fighters, 51 new building inspectors have all been employed leading to fulfilment of a few conditions that were required for the GSP eligibility; while 3,407 garment factories out of 3,668 have been inspected, will it be fair on Bangladesh to receive a set of new questions relating to yet another standard of inspection? Will USTR continue to ask questions on trade unions?
No matter how many humane stories are reported, no matter how many great factories the foreign delegations visit, somehow Bangladesh is having a tough time convincing the rest of the world that it's changing and probably it has far better workplace ethics than many in our part of the world. The fact that major retailers and brands subject us to regular reviews on labour conditions, and the fact that we must comply is a message that is not being conveyed clearly enough. Perhaps. Perhaps the delegates visiting the world class factories know that there may be many factories which are not like the ones that they are being shown and that there may be many more which don't have the same floors, the same machines or the same gloss. Perhaps it's time to show them samples of all types of factories, and assure them that all that could have been remedied in terms of labour practices have been done at even the smaller and medium size factories; it's time to tell them that there may be factories in shared buildings and perhaps there's a space crunch there, but that does not disqualify the products that they have been producing for so many years and that even smaller factories have become better with social compliance. Ultimately it is the social compliance that matters as that is the only area where the owners and the workers bridge. An owner who adopts a humane approach towards the workers cannot be negligent towards his/her own workers' safety. Our factory buildings may not have been entirely retrofitted or fully relocated overnight, but reality is that the US, EU and the rest of the world needs to allow Bangladesh two more years to remediate structural shortcomings and also look into more humane stories that this land can offer through a proper projection of the four million workers engaged in the sector. A couple of simple and clear messages need to be conveyed to them:
Deviations don't define sectoral performance. Overnight cosmetic treatments with increased price pressure and practices won't help. The general standard of compliance has gone up by all rules set by either prescription or proactive remediation undertaken by all the stakeholders in the industry. Therefore, at a time when fair wages are being discussed, when the number of unions are going up and when every owner is meaningfully engaging with workers in every sense of the word, USTR should kindly take into consideration that rating Bangladesh's labour and safety standards in its reviews need to be done with a little more compassion and, of course, with a clear understanding of the four million workers' dependence on the sector. A refusal to restore GSP facilities will only delay the path of progress that Bangladesh has embarked on, as it will be a moral dent on the industry. Bangladesh couldn't have done better in the last two years. Therefore reviews should not have the same observations of the earlier reports, rephrased and pasted on it. The report card should not be a case of a simple “ditto”, as Bangladesh has gone beyond the dots and done a lot more.
The writer is Managing Director, Mohammadi Group.