June 27, 2013 in Nation/World

Bangladesh likely to lose trade privileges

White House expected to make announcement today
Matthew Pennington Associated Press

WASHINGTON – The United States is expected to suspend trade privileges for Bangladesh because of concerns over labor rights and worker safety that intensified after hundreds died there in the global garment industry’s worst accident.

Congressional aides said the Obama administration would make its announcement today, the culmination of a yearslong review of labor conditions in the impoverished South Asian nation.

Democratic lawmakers have been pushing for the step. Under the Generalized System of Preferences, Bangladesh can export nearly 5,000 products duty-free to the U.S., its leading market.

While the GSP covers less than 1 percent of Bangladesh’s nearly $5 billion in exports to the U.S. and doesn’t include the lucrative garment sector, it could deter American companies from investing in Bangladesh.

The office of U.S. Trade Representative has said a decision would be made by the end of June whether to curtail Bangladesh’s trade privileges. The office did not respond Wednesday to requests for comment.

Bangladesh, one of the world’s poorest countries, is anxious to keep the trade benefit.

While the immediate economic costs may not be significant, it carries reputational costs and may sway a decision by the European Union, which also is considering withdrawing GSP privileges. EU action could have a much bigger economic impact, as its duty-free privileges cover garments.

Bangladesh’s government says it is taking steps to improve worker safety after the April 24 collapse of Rana Plaza in Dhaka that killed 1,129 people, and to amend the nation’s labor law.

The U.S. Trade Representative review of labor conditions in Bangladesh follows a petition filed in 2007 by the AFL-CIO seeking withdrawal of the GSP benefits.

The review was expedited late last year amid concern from U.S. lawmakers on deadly industrial accidents, deteriorating labor rights and the April 2012 killing of prominent labor activist Aminul Islam – a case that has not been solved.

Calls for the benefits to be curtailed have multiplied since the Rana Plaza disaster.

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