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.
TEXT SIZE - +
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

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

John the XXIII and John Paul II will be made saints in a ceremony at St. Peter’s Square on April 27 More

Thailand Reacts to Plots Targeting Israelis

Authorities hope arrest of two Lebanese suspects will disrupt plot to attack young Israeli tourists More

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

'Once Upon a Forest' takes viewers deep into heart of tropical rainforest More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pope Francis Hopes Dual Canonizations Will Reconcile Churchi
|| 0:00:00
...
 
🔇
X
Jerome Socolovsky
April 22, 2014 4:14 PM
On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Robotic Mission Kicks Up Lunar Dust

A robotic mission to the moon was deliberately crashed onto the lunar surface late last week, but not before scientists had collected data gathered by the spacecraft which was designed to self-destruct. VOA's Rosanne Skirble reports on the preliminary findings of the craft, called LADEE - an acronym for Lunar Atmosphere and Dust Environment Explorer.
Video

Video Boko Haram Claims Responsibility for Bombing in Nigerian Capital

The Nigerian militant group known as Boko Haram has claimed responsibility for a bombing in the capital on April 14th that killed 75 people. In the video message, Abubakar Shekau, the man who says he ordered the bombing, says nothing about the mass abduction of more than 100 teenage girls, most of whom are still missing. Heather Murdock has more for VOA from Abuja.
Video

Video Ukraine Developments Hang Over Obama Trip to Asia

President Barack Obama's trip to Asia this week comes as concerns over Beijing's territorial ambitions are growing in the region. Those concerns have been compounded by Russia's recent actions in Ukraine and the possibility that Chinese strategists might be looking to Crimea as a model for its territorial disputes with its neighbors. VOA's Bill Ide has more from Beijing.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.