News / Economy

US Suspends Trade Benefits for Bangladesh Over Safety

A Bangladeshi rescuer stands amid the rubble of a garment factory building that collapsed on April 24 as they continue searching for bodies in Savar, near Dhaka, Bangladesh, May 12, 2013.
A Bangladeshi rescuer stands amid the rubble of a garment factory building that collapsed on April 24 as they continue searching for bodies in Savar, near Dhaka, Bangladesh, May 12, 2013.
Reuters
President Barack Obama on Thursday cut off longtime U.S. trade benefits for Bangladesh in a mostly symbolic response to dangerous conditions in that country's garment industry that have cost more than 1,200 lives in the past year.
 
“I have determined that it is appropriate to suspend Bangladesh ... because it is not taking steps to afford internationally recognized worker rights to workers in the country,” Obama said in a statement.
 
The U.S. sanction does not directly affect Bangladesh's multi-billion-dollar clothing exports to the United States,  which came under scrutiny after the collapse of the Rana Plaza garment factory building in April that killed 1,129 people and the Tazreen factory fire in November that killed 112.
 
But it could influence the European Union to take similar action, which would have a much bigger impact on Bangladesh and its garment sector.
 
“This was not a decision taken lightly,” new U.S. Trade Representative Michael Froman told reporters on a phone call. “Our goal, of course, is not only to see Bangladesh restore its eligibility for [the trade] benefits, but to see Bangladeshi workers in safe, appropriate work situations.”
 
Richard Trumka, president of the AFL-CIO labor federation, said the decision sent an important message to countries that receive duty-free access to the U.S. market under the Generalized System of Preferences (GSP) program.
 
“Countries that tolerate dangerous - and even deadly - working conditions and deny basic workers' rights, especially the right to freedom of association, will risk losing preferential access to the U.S. market,” Trumka said.
 
It also puts American companies on notice they must take meaningful steps to improve conditions for Bangladesh's factory workers, Senate Foreign Relations Committee Chairman Robert Menendez, a New Jersey Democrat, said in a statement.
 
“No one will want to wear clothing that is 'Made in Bangladesh' if it is made on the blood of workers. It's time for American industry to show leadership and work with their European counterparts on a global standard for safety.”

U.S. heavily taxes clothing from Bangladesh

Suspending Bangladesh from the GSP program will increase U.S. duties on an array of products the country exports to the United States, such as tobacco, sporting equipment, porcelain china, plastic products and a small amount of textile products.
 
But it will not directly affect Bangladesh's main export, clothing, since garments are not eligible for duty cuts under the program, which was created in 1976 to help economic development in the world's poorest countries and to reduce import costs for U.S. companies.
 
In 2012, Bangladesh was spared about $2 million in U.S. duties on about $35 million worth of goods under the GSP program, but it paid about $732 million in U.S. duties on $4.9 billion of clothing exports not covered by the program, said Ed Gresser, a trade analyst with the GlobalWorks Foundation.
 
A European Union decision to suspend trade benefits would have far more impact since Bangladesh's clothing and textiles exports receive duty-free treatment there in contrast to average U.S. duties of around 15 percent.
 
EU officials raised the possibility of suspension in early May in the hope of prodding Bangladesh into action.
 
The EU imported roughly 9.2 billion euros ($12.13 billion) of goods from Bangladesh last year, according to data from the EU's executive branch, the European Commission.
 
Clothing and textile products ranging from towels and bedding accounted for almost 93 percent of those goods.
 
EU and Bangladeshi officials will meet in Geneva in July for talks aimed at improving safety conditions in Bangladesh and preserving the country's trade benefits.
 
An EU spokesman in Brussels said the U.S. action underscored the EU's concerns.
 
Petition filed in 2007
 
The United States' own review dates back to 2007, when the AFL-CIO, the main U.S. labor group, first filed a petition asking that Bangladesh's trade benefits be revoked.
 
Despite the relatively small volume of trade affected by the U.S. decision, Froman said Bangladeshi officials put great value on remaining in the program.
 
“We will be staying very much in direct and continuous contact with the government of Bangladesh as they take additional actions on workers rights and workers safety,” Froman said. “We'll review their status at the appropriate time.”
 
European retailers have responded to the two tragedies by signing an agreement to promote worker safety in Bangladesh, but many U.S. retailers have balked at accord, saying it gives unions too much control over ensuring workplace safety.
 
They have been working instead with former Maine U.S. senators George Mitchell, a Democrat, and Olympia Snowe, a Republican, on an alternative plan to improve fire and safety regulations in the garment factories of Bangladesh.
 
The effort is being coordinated by the Bipartisan Policy Center, a Washington think tank.
 
“At this point only a few final details remain to be worked out and agreed upon. We remain on track to complete the process by early July,” BPC President Jason Grummet said earlier this week in an email.

You May Like

Multimedia Obama, Modi Break Nuclear Deal Deadlock

Impasse over liability issues had been stalling bilateral civilian nuclear cooperation; deal reached at start of US president's three-day visit to India More

WHO's Late Efforts in Tackling Ebola Highlight Need for Reform

Health experts debate measures to reform agency’s response to global public health emergencies in special one-day session on deadly outbreak More

One Tumultuous Year in Power for CAR's President

As sectarian violence raged across Central African Republic, interim President Catherine Samba-Panza has Herculean task: to end civil war and put country back on right track More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Worldwide Photo Workshops Empower Youthi
X
Julie Taboh
January 23, 2015 11:08 PM
Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.
Video

Video US Marching Bands Grow Into a Show of Their Own

The 2014 Super Bowl halftime show was the most-watched in history - attracting an estimated 115 million viewers. That event featured pop star Bruno Mars. But the halftime show tradition started with marching bands, which still dominate the entertainment at U.S. high school and college American football games. But as Enming Liu reports in this story narrated by Adrianna Zhang, marching bands have grown into a show of their own.
Video

Video Secular, Religious Kurds Face Off in Southeast Turkey

Turkey’s predominantly Kurdish southeast has been rocked by violence between religious and secular Kurds. Dorian Jones reports on the reasons behind the stand-off from the region's main city of Diyarbakir, which suffered the bloodiest fighting.
Video

Video Kenya: Misuse of Antibiotics Leading to Resistance by Immune System

In Kenya, the rise of drug resistant bacteria could reverse the gains made by medical science over diseases that were once treatable. Kenyans could be at risk of fatalities as a result if the power in antibiotics is not preserved. Lenny Ruvaga has more on the story from Nairobi.
Video

Video Solar-Powered Plane Getting Ready to Circumnavigate Globe

Pilots of the solar plane that already set records flying without a drop of fuel are close to making their first attempt to fly the craft around the globe. They plan to do it in 25 flying days over a five month period. VOA’s George Putic reports.
Video

Video How Experts Decide Ethiopia Has the Best Coffee

Ethiopia’s coffee has been ranked as the best in the world by an international group of coffee connoisseurs. Not surprisingly, coffee is a top export for the country. But at home it is a source of pride. Marthe van der Wolf in Addis Ababa decided to find out what makes the bean and brew so special and how experts make their determinations.
Video

Video Yazidi Refugees at Center of Political Fight Between Turkey, Kurds

The treatment of thousands of Yazidis refugees who fled to Turkey to escape attacks by Islamic State militants has become the center of a dispute between the Turkish government and the country's pro-Kurdish movement. VOA's Dorian Jones reports.
Video

Video World’s Richest 1% Forecast to Own More Than Half of Global Wealth

The combined wealth of the world's richest 1 percent will overtake that of the remaining 99 percent at some point in 2016, according to the anti-poverty charity Oxfam. Campaigners are demanding that policymakers take action to address the widening gap between the ‘haves’ and the ‘have nots’, as Henry Ridgwell reports for VOA from London.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8930
JPY
USD
117.98
GBP
USD
0.6673
CAD
USD
1.2445
INR
USD
61.498

Rates may not be current.