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

Islamic State Survivor: A Yazidi Girl's Tale

Sarah Said Haydar, captured a year ago while fleeing Islamic State onslaught in northern Iraq, was so traumatized by militants, she sought to end her own life More

EU, US Applaud Kosovo Law on Special Court

Joint statement says lawmakers' decision to address allegations of war crimes 'demonstrated their commitment to the rule of law and to honor international agreements' More

ASEAN Ministers to Push for S. China Sea Agreements

According to documents obtained by VOA Khmer, ministers will stand up for 'freedom of navigation, unimpeded lawful maritime commerce, trade and over flight' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Cambodia Makes Progress Curbing Bear Tradei
X
Robert Carmichael
August 04, 2015 3:07 PM
Cambodia’s wild bears are under unprecedented pressure. Their native forests are being cut down at record rates, and China's huge demand for traditional medicine has made them targets. But experts say Cambodia's conservation efforts are setting an example that has put it well ahead of its neighbors in protecting bears. Robert Carmichael reports for VOA from Phnom Penh.
Video

Video Cambodia Makes Progress Curbing Bear Trade

Cambodia’s wild bears are under unprecedented pressure. Their native forests are being cut down at record rates, and China's huge demand for traditional medicine has made them targets. But experts say Cambodia's conservation efforts are setting an example that has put it well ahead of its neighbors in protecting bears. Robert Carmichael reports for VOA from Phnom Penh.
Video

Video Growing Number of E. Jerusalem Palestinians Seek Israeli Citizenship

Most Palestinians living in East Jerusalem have long rejected the option of full Israeli citizenship, seeing it as a betrayal to their political cause - the formation of a Palestinian state with East Jerusalem as its capital. But as that dream remains elusive, more and more Palestinians are applying for Israeli citizenship. Zlatica Hoke reports the decision is hard for many Palestinians who say they have to be pragmatic about it.
Video

Video With No Money, More Students, African Universities Struggle

Academics from around the African continent converged in Johannesburg last week for the African Universities Summit, a chance to tackle some of the major issues facing higher education in Africa today. VOA's Anita Powell reports from Johannesburg.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Wisconsin's Voter ID Law Still Mired In Controversy

Voter ID laws have sparked controversy across the US. More than 30 states enacted laws requiring citizens to show identification before they vote. Against fierce opposition, the state of Wisconsin recently enacted one the most restrictive voter ID laws in country. As Jeff Swicord reports, no one can predict its impact as the 2016 election nears.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Ebola Vaccine Hailed as Highly Effective

At last, there's a way to end the suffering from the Ebola epidemic that has ravaged West Africa for more than a year. Researchers say the vaccine is so effective, there may never be a major outbreak of Ebola again. VOA's Carol Pearson reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs

World Currencies

EUR
USD
0.9113
JPY
USD
124.00
GBP
USD
0.6404
CAD
USD
1.3130
INR
USD
63.752

Rates may not be current.