Dhaka, June 16, 2013: Bangladesh exported goods worth $35million or 0.72 percent of the total to the USA under its Generalized System of Preference (GSP) programme, commerce minister GM Quader told the country’s parliament on Sunday.
“As per the statistics of United States International Trade Commission (USITC) programme the Bangladesh’s total amount of export to the USA was $4,878million in 2012.
Of the items, goods worth $35million was exported to the USA under the Generalized System of Preference (GSP) facility,” Quader said replying to a tabled question of treasury bench member Nurul Islam B.Sc.
The US government has been threatening to cancel the facility in an apparent bid to sensitize Bangladesh in labor issues.
US President Barack Obama could soon decide to cut off trade benefits for Bangladesh, in a largely symbolic response to tragedies in Bangladesh’s garment sector that have cost more than 1,200 lives in the past eight months, it is reported.
The US Trade Representative’s office, with input from other government agencies, is completing its recommendations in preparation for a White House announcement by June 30.
Even though the trade benefits affect less than 1% of Bangladeshi exports to the United States, the Bangladeshi government has pleaded with the Obama administration not to be cut off.
The AFL-CIO, the largest US labour organisation, first filed a petition to suspend Bangladesh from the US Generalised System of Preferences programme in 2007.
The US government has put off that decision for six years, hoping the threat would be enough to encourage Bangladesh to make long-needed labour reforms.
But after the Tazreen factory fire in November that killed 112 people and the Rana Plaza building collapse in April that killed 1,129 more, it seems likely that Obama will eliminate or reduce the trade benefits, Celeste Drake, the AFL-CIO’s lead on trade issues, told Reuters this week.
The past year has been so horrendous that unless the United States acts the labour provisions of the GSP program will be seen as meaningless, she said.
The GSP programme is aimed at helping create jobs in poor countries by waiving US duties on thousands of goods.
Bangladesh has been in the programme since it began in 1976. But its main export, clothing, is not eligible for GSP tariff cuts, in deference to the US textile and apparel industry, which employed some 2.4 million workers four decades ago compared to less than 300,000 now.
Mother of a garments worker wailing as she could not identify her daughter from the mutilated bodies piled at a makeshift morgue in Dhaka on May 9, two weeks after the ‘Rana Plaza’ building collapse in Savar.
Last year, the GSP programme spared Bangladesh about $2 million in duties on $35 million worth of tents, golf equipment, plates and other items it exported to the United States, said Ed Gresser, a trade analyst with the GlobalWorks Foundation.
But Bangladesh paid about $732 million in duties on $4.9 billion worth of clothing to the United States. That is almost twice as much as the $383 million in US tariffs collected on $41 billion worth of French goods in 2012, Gresser said.
In the past, some lawmakers have proposed changing the GSP programme to provide duty-free benefits for clothing from Bangladesh and Cambodia, but US textile manufacturers lobbied to prevent action on the legislation.
At least 13 countries have lost some or all of their GSP benefits since workers rights protections were added to the eligibility criteria in the 1980s. Most have been reinstated after making progress on the concerns.
While Bangladeshi clothing manufacturers would not be directly affected by a decision to suspend the GSP programme, Drake said she expected other Bangladeshi companies hit with increased duties to join the international community in lobbying the government for labour reforms.
“It’s a small stick, which is perhaps right, given that it is a developing country. Nobody wants to do something that would be an earthquake to their economy,” Drake said.
Sanchita Saxena, associate director of the Center for South Asia Studies at the University of California at Berkeley, said revoking Bangladesh’s GSP benefits would not help workers in Bangladesh’s garment industry.
“If the US wants to help improve conditions, international brands and international NGOs can help in building capacity to monitor the thousands of factories that need monitoring and help to enforce some of the laws that are in the books,” she said.
US retailers should also sign an agreement embraced by European retailers to improve safety conditions in Bangladesh’s garment industry, Saxena said.
New RMG Markets
To another question from treasury bench member M Abdul Latif, the Bangladesh Commerce Minister informed the House that the government had taken measures to create new markets of readymade garments (RMG) abroad.
He hoped that the country’s new export policy (2012-2015) would bring qualitative change in export trade and ensure a competitive edge in the risky world trade.
He said adding the government took part in nine international trade fairs organized by Export Promotion Bureau (EPB) in the fiscal year 2011-12 aimed at expanding the RMG markets worldwide.
Quader said steps have also been taken to take part in the international trade fairs in Russia, South Africa, Japan, Brazil, China, India, South Korea and send delegations there to explore market.
Initiatives have been taken to expand business among the SAARC countries and reduce trade imbalance under the agreement on South Asian Free Trade Area (SAFTA), he added.