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GSP To US Market

Not much done to get it back

Staff Correspondent
The USA is set to review the suspension of the Generalised System of Preferences (GSP) in May but Bangladesh has not made much progress in fulfilling the requirements for regaining the trade privileges.
The American government suspended Bangladesh's GSP status in June last year citing serious shortcomings in safety standards and lack of workers' rights at the industrial units of the country. As many as 16 conditions were put forward at that time, which have to be implemented by Bangladesh to regain the trade facility during the review.
The government amended the labour law in July last year to meet one of the conditions, but has not fully implemented the new law, which provides for full freedom of association by workers.
However, Bangladesh has made progress in some areas like registration of trade unions, said Alonzo Glenn Suson, country director of Solidarity Centre of American Federation of Labour and Congress of Industrial Organisation (AFL-CIO) in Bangladesh.
More than 100 trade unions have been registered since January 2013. But at the same time there are reports of termination of trade union leaders from the factories, Suson added.
Another major condition was to recruit 200 additional factory inspectors by December last year, but the labour and employment ministry has not even published advertisements in newspapers for recruitment.
The government could only begin factory inspections by 30 teams of the Bangladesh University of Engineering and Technology from November 21 last year. They visit factoriesonly to check whether the factory buildings are safe and enough fire safety measures are in place.
The government has also failed to arrest the killers of labour leader Aminul Islam, which is another condition for regaining the GSP status.
A committee has been formed to draft a separate labour law for workers of the factories in the Export Processing Zones (EPZs). The law is supposed to give EPZ workers legal space to demonstrate for realising their demands but it has not been passed yet.
The progress made so far is not enough to regain the GSP, Suson said. “The roadmap is pretty clear. It needs consistency, transparency to deliver and to resolve the problems."
The Obama administration suspended the duty waiver scheme putting pressure on Bangladesh to scale up factory and labour standards.
Only 0.54 percent or $26 million of the total annual exports from Bangladesh to the US enjoyed duty benefits under the GSP scheme.
Bangladesh's main export — garment - was not included in the scheme. Garment exporters pay 15.3 percent duty to the US customs,
which amounted to $746 million in 2012 for exporting a little above $5billion of apparel items.
But regaining GSP to the US market is important because other countries, where Bangladesh enjoys the trade privilege, particularly the European Union, might be influenced by the US decision.
Some 60 percent of Bangladesh's export items go to the EU. Under the European GSP scheme introduced in 1971, Bangladesh enjoys 12.5 percent duty benefits on all exports to the region.
Bangladesh signed an agreement, known as Sustainability Compact, with the EU in Geneva in July last year promising again to meet similar conditions, after the Rana Plaza collapse, the nation's worst industrial disaster that killed more than 1,000 workers.
On progress in fulfilling the conditions, Commerce Minister Tofail Ahmed, however, has a different view: major steps had been taken to address some issues.
"I am hopeful that we will regain the GSP status by June as we have already made remarkable progress so far."
Tofail also said the government would raise issues of the GSP and duty-free and quota-free access to the
US market at the first Ticfa (Trade and Investment Cooperation Forum Agreement) meeting to be organised in Dhaka in April.
Emerging from yesterday's meeting with Tofail at the minister's secretariat office in the capital, US Ambassador to Bangladesh Dan W Mozena said, "Bangladesh has done a lot, but a lot of things have to be done for rejoining the US GSP programme."
The government will have to make progress in the 16 areas for reinstatement of the GSP, he added.
Mozena denied any links between GSP reinstatement and Ticfa that Bangladesh signed with the US in Washington in November last year.
"The purpose ofTicfa is to address the bilateral trade issues. Ticfa created a place or platform for raising issues and for resolving the issues," theUSambassadorsaid.
A delegation from the US will arrive in Bangladesh on April 6 to hold the Ticfa meeting, Mozena added.
He also suggested that the committee comprised of three secretaries and five diplomats from the US, the Netherlands, the EU, Britain and Germany should continue monitoring the progress in actions on the GSP.