Roadblock to restoration of GSP

Slow progress in hiring labour inspectors, shortcomings in the amended labour law and lack of action to bring the EPZ law into conformity with international standards remain as the major roadblock to the reinstatement of GSP benefits to the US market.
Late last month, the US government conveyed to Bangladesh its conclusion that Bangladesh had not made sufficient progress to date under the Action Plan to warrant reinstatement of GSP benefits.
“…as has been conveyed with specificity to the government of Bangladesh, a great deal remains to be done to implement some of the most important elements of the (GSP) Action Plan,” said Eric Biel, acting Associate Deputy Undersecretary for International Lbour Affairs at the US Department of Labour.
He said this while making his statement at a hearing to examine the ‘prospects for democratic reconciliation and workers’ rights in Bangladesh held at the US Senate Committee on Foreign Relations in Washington on Tuesday. The plans for a larger, well-trained force of labor and fire and building safety inspectors are still in their initial stages, and the number of inspectors hired to date is relatively small, said Eric Biel.
He observed that labour law amendments enacted in July 2013 do not address the concerns raised in the Action Plan, including severe restrictions on collective bargaining, in particular at the industry and sector levels, nor inadequate protections against employer interference in union activity.
Eric Biel also said there also has not been enough progress in achieving justice for the 2012 murder of labor organizer Aminul Islam. In addition, he said, EPZs (Export Processing Zones) remain governed by a separate labor law providing inferior protections for workers in those zones about which both we and the ILO have long expressed deep concerns.
“Today, factories in EPZs remain outside the reach of labor and safety inspectors who cover the rest of the country; unions are still barred; and the EPZ governing authority retains nearly complete discretion with respect to labor-management relations,” he explained.
Eric Biel said concerns also persist with respect to other elements of the Action Plan focused on improving procedures for responding to complaints alleging violations of fire and building safety standards and unfair labor practices.
Recent reports of union organizers being harassed and factories registering employer-organized unions are reminders that increased union registration numbers alone are not an adequate measurement of progress on freedom of association, he said.
Eric Biel noted that there have been indications of progress in some areas of the Action Plan, including the registration of new trade unions, the dropping of dubious criminal charges against leaders of the Bangladesh Center for Workers Solidarity (BCWS), the registration of the BCWS, and the government of Bangladesh’s commitment to fund programs through the ILO and the American Center for International Labor Solidarity (Solidarity Center) in the shrimp processing sector. There have also been steps taken with the ILO and other stakeholders to develop a plan for many more, and better trained, labor and fire and building safety inspectors, he added.
The US Generalized System of Preferences (GSP) is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 123 designated beneficiary countries and territories.
Although Bangladesh used to export less than 1 percent of $5 billion annually under the GSP to the US market, the impact of its suspension is significant because some other countries in the European Union, where Bangladesh enjoys duty waiver, might be encouraged by the US decision anytime. US President Barac Obama, on June 27, 2013, issued a proclamation suspending Bangladesh’s GSP trade benefits based on the Bangladesh government’s failure to meet the GSP statutory eligibility criterion of “taking steps to afford internationally-recognized worker rights to workers in the country.”
At the time of the President’s decision, the United States provided the government of Bangladesh with a GSP “Action Plan” listing specific actions that Bangladesh should take to provide a basis for reinstatement of GSP benefits. The Action Plan specifically calls for improving labor, fire, and building standards, removing obstacles to freedom of association and collective bargaining, and reforming labor laws.
However, Bangladesh could avert much deeper economic impact of the suspension as the garment products had not been included in the GSP scheme. Bangladeshi apparel exporters have to pay 15.3 percent duty to enter the US market since garments are not covered by the scheme.