Dhaka expresses shock over U.S. decision to revoke preferential tariff status

This file photo shows labels of garments made in Bangladesh that were purchased at a Wal-Mart store in Atlanta. The U.S. on Thursday, suspended trade privileges for Bangladesh because of concerns over labour rights and worker safety.

The U.S. decision to revoke Bangladesh’s preferential trading status has come as a big shock for not only the government but also for the business class and garment workers who are demanding its reininstatement.

In the wake of repeated disasters, it was expected that Washington would curtail Bangladesh’s Generalised System of Preferences (GSP) facility. The decision was prompted, mainly by last November’s devastating fire at Tazreen Fashions Limited which resulted in 110 deaths and the Rana Plaza collapse in April, which killed more than 1100 people, mostly workers.

Bangladesh was among 127 countries given tariff-free privileges under Generalised System of Preferences (GSP), a 37-year-old scheme that eliminates duties on imports from those nations to aid their development.

Shocked at the decision, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Atiqul Islam found “no logical reason” for the U.S. action . as it came at a time when the country was working towards improving working conditions and the Labour Law has already been amended. The Knitwear units’ association BKMEA also termed the decision ‘unfair’.

Further, labour leaders fear that similar steps taken by the European Union (EU) would badly damage the country’s garment sector and badly hurt the industry’s 3.6 million workers, mostly female.

“While Bangladesh is absolutely respectful of a trading partner’s choice of decisions, it expresses its deep concern that this harsh measure may bring in fresh obstacles in an otherwise flourishing bilateral trade,” a Foreign Ministry statement said. The country also hoped the US would soon bring back the GSP status.

“It cannot be more shocking for the factory workers of Bangladesh that the decision to suspend GSP comes at a time when the government of Bangladesh has taken concrete and visible measures to improve factory safety and protect workers’ rights,” it added.

The primary concern of both the government and business leaders is about the EU following suit the 27-nation bloc being Bangladesh’s biggest importer. Garment exports to EU amount to $12 billion annually, roughly three-fifths of the country’s production.

With general election only six month away, the decision has also strengthened opposition’s claim that the government’s failures have brought this debacle.