Washington, D.C. – An interagency review led by the Office of the U.S. Trade Representative (USTR) has concluded that Bangladesh has made some important progress, but must do more to address the worker rights and worker safety issues that led President Obama to suspend the country’s Generalized System of Preferences (GSP) trade benefits in June 2013. At the time of the suspension, the Administration provided the Government of Bangladesh with an Action Plan which provides a basis for the President to consider the reinstatement of GSP trade benefits.
“The Obama Administration has been engaging the Bangladesh government and stakeholders over the past year to press for changes to address the worker rights and worker safety issues that led to the President’s decision to suspend GSP trade benefits,” said United States Trade Representative Michael Froman. “We are seeing some improvements that move us closer to our shared goal of protecting workers from another workplace tragedy such as the April 2013 Rana Plaza building collapse, including a significant increase in the registration of unions. However, we remain concerned about the large number of factories that have yet to be inspected, the lack of progress on needed labor law reforms, and continuing reports of harassment of and violence against labor activists who are attempting to exercise their rights.”
As the basis for its determination, the Administration reviewed progress by the Government of Bangladesh in implementing the specific measures listed in the Action Plan. The review found that there has been progress in some areas. For example, since June 2013, the Government of Bangladesh has registered approximately 120 new unions in the garment sector, has dropped pending criminal charges against labor activists, is cooperating with the private sector initiatives, the “Alliance” and the “Accord”, on plans to inspect the thousands of factories in the ready-made garment (RMG) sector, and has reportedly suspended operations in approximately 20 factories found to be in imminent danger of structural failure or other catastrophic accident.
However, the review also found that the Government of Bangladesh has not yet implemented substantial parts of the Action Plan. The government is behind schedule in carrying out many hundreds of critical safety inspections in garment factories, as well as meeting its commitments to hire additional inspectors. The government has also been slow to respond to continuing reports of harassment and violence against labor activists. The review concluded that the government needs to develop a credible and effective mechanism for responding to and addressing allegations of unfair labor practices. Since the suspension of GSP, the government has also not advanced the labor law reforms called for in the Action Plan, including changes to ensure that workers are afforded the same rights and protections in Export Processing Zones as in the rest of the country.
In addition to engaging regularly with the Government of Bangladesh, the U.S. Government is also closely coordinating with the European Union, the International Labor Organization (ILO) and other international partners under the July 2013 Sustainability Compact on worker rights and factory safety in Bangladesh. Ahead of the Compact’s one year anniversary, the U.S. Government notes Bangladesh’s progress towards fulfilment of some of the commitments in the agreement and welcomes continued positive collaboration between all signatories in support of Bangladesh’s adoption of international standards in worker rights and safety.
The President's June 2013 decision to suspend Bangladesh’s trade benefits under the GSP program means that U.S. imports of GSP-eligible products from Bangladesh are no longer eligible for duty-free treatment. In 2012, the total value of U.S. imports from Bangladesh under GSP was $34.7 million; the top GSP imports from Bangladesh included tobacco, sports equipment, porcelain china, and plastic products.
Legal authorization for duty-free treatment for all countries under GSP expired on July 31, 2013. Congress is considering legislation to renew the program.
The U.S. Government has provided assistance through the Department of Labor (DOL) and the U.S. Agency for International Development (USAID) for programs that support the strengthening of worker rights and safety in Bangladesh. For example, DOL is providing technical assistance to help the Government of Bangladesh better enforce fire and building safety standards and to train workers’ organizations to more effectively identify and report violations and propose and monitor remediation efforts. USAID’s civil society strengthening initiatives promote input from grassroots, community-based organizations, including trade unions, to develop national policies, including employment policy. USAID is also directly providing assistance to select public institutions to be more transparent; promoting clarity on legal and regulatory rights; and supporting legal advocacy initiatives and increased access to formal legal systems and recourse. USAID programs also raise public awareness of human rights, including labor rights.
The review was conducted by the USTR-chaired GSP Subcommittee of the interagency Trade Policy Staff Committee, which includes representatives of the Departments of State, Labor, Commerce, Agriculture, and the Treasury, as well as USAID. The GSP Subcommittee expects to carry out its next review of Bangladesh’s progress on the GSP Action Plan in December 2014.