Bangladesh needs proper homework and to show visible improvements in safety and workers trade union right issues, and address other areas of concern instead of merely giving lip-services to regain suspended GSP benefits in the US market, economists say.“In the mid-term, we need to do proper homework and will have to show visible improvements in the areas of concerns including trade union and safety issues,” Prof Mustafizur Rahman, Executive Director of the Centre for Policy Dialogue (CPD), a leading think-tank, told UNB on Friday.
He said the US will review the GSP (Generalized System of Preferences) scheme after six months, when Bangladesh can apply for getting back the benefits.
“It seems to me that getting back the GSP benefits won’t be possible within a year as it’s not a job that can be accomplished overnight… decision will be taken after a certain process.”
Replying to a query, Prof Mustafizur said there would be no immediate impact on the real economy, but the export items (US$ 40 million annually) which were enjoying GSP benefits in the US market will be discouraged as the exporters will now have to pay duty.
“Again it depends on how quickly we can address the concerns. But I say there’ll be a signaling impact,” the economist said.
Dr Khandaker Golam Moazzem, additional director of the CPD’s research wing, also believes that restoring the GSP facility will not be possible in a short period, as there is a process it must follow that won’t be easy or short. “It is a big issue to ensure safety and improve working conditions.”
Since the general election is approaching, he said, it will be a challenge for the government to take such steps that might anger the RMG owners. “But the government can review the minimum wages for the workers.”
Dr Moazzem said many things are coming into focus like fire at a shoe factory in the EPZ, the incident of 200 workers falling sick at a factory from drinking water on the site, etc. “It will take time to come out from the present image crisis.”
The Prime Minister’s foreign affairs adviser Dr Gowher Rizvi, in an interview with the BBC’s Bangla service, did admit some blame must fall on the government, presumably on the diplomatic front.
On whether the GSP cancellation represented a diplomatic failure for the government, Dr Moazzem said actually there was US internal political pressure, in reference to the pressure applied by groups like the AFL-CIO (The American Federation of Labor and Congress of Industrial Organizations), which had been lobbying since 2007 for the GSP withdrawal from Bangladesh.
“There was a good hearing in the USTR. We replied to the US queries and additional replies were also given later. There was a focus on rapid solution. But it was made clear that in long-term, we’ve not been taking steps. It was a weakness. So, there was a deficit in the process,” he said.
Dr Moazzem also said the USTR hearing took place before the RanaPlaza incident. “When it collapsed, our weaknesses were exposed to them. It created a trust deficit. But there was huge political pressure from the US side.”
He said the government and stakeholders need to set a timeframe for accomplishing each step and sharing responsibility including amendment of labour law to allow workers to associate.
“Finally, we need to work together, for our interest, to ensure international standard labour related laws, and a sound and safe working environment. At one stage Bangladesh can expect to get back the GSP benefit,” the economist said.
On how the matter of the GSP might relate to the much talked-about but yet-to-be-signed Ticfa (Trade and Investment Cooperation Framework Agreement), he said if Ticfa is signed, Bangladesh will get a forum where issues will be discussed in a better way. “It will create a scope for Bangladesh to speak up (demanding restoration of GSP benefit).”
Asked whether the EU will also follow the US, Dr Moazzem said: “The last statement issued by the European Union (EU) makes us hopeful. The EU criticised in tough language after Tazreen and RanaPlaza incidents but they actively remained engaged with Bangladesh.”
The EU has so far evaluated things positively and taken some good initiatives, like forming a compliance fund from which they will spend for Bangladesh too, he said.
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President M Atiqul Islam said Bangladesh needs to give duty for some 99.50 percent of its total exports to the US market. Bangladesh paid US$ 746 million last year as duty.
“We’re closely working with the USA giving priority to workers right, and safety. But if there’s any negative impact due to such adverse decision by the US, workers will be the worst victims, apart from the indirect blows suffered in the banking, transportation and shipping sectors,” he said.
“We’re surprised and frustrated. It’s our expectation that the USA will soon reconsider it and will play role to make the industry sustainable,” the BGMEA boss said.
President of Exporters’ Association of Bangladesh (EAB) Abdus Salam Murshedy makes the point that the GSP issue should not be considered in terms of trade amount. “The US is giving us GSP, it’s a message to the world and it carries Bangladesh’s image. So, regaining the GSP benefit in the US market is a must.”
Murshedy, also former BGMEA president, said the BGMEA, BKMEA and the government are working together to improve working conditions, to ensure international standard safety. “It’s not possible overnight. But efforts are there and there is improvement.”
Yet he also remained faithful to the image of garment owners as non-accommodating and out of touch, by saying they should go for trade union gradually instead of doing it immediately so that the workers understand their rights and responsibilities. “Trade Union should be formed by the actual workers.”
On June 27, US President Barack Obama suspended Bangladesh’s designation as a beneficiary country under the Generalized System of Preferences (GSP) programme, citing Bangladesh’s inability to take steps to adopt internationally recognised workers rights.
The decision to suspend Bangladesh’s designation came after a multi-year review by the U.S. Trade Representative.
The US in the past suspended GSP benefits for Paraguay in 1988 and restored the facility in 1991. Sri Lanka also lost the GSP benefit in October 2010 but got back the facility for a limited period in October 2011 that came into effect November 2011.
The US government, for its part, has recommended a set of action plans for Bangladesh to reclaim the GSP. Bangladesh will have to do three things to remove all the concerns of the US authority.
Firstly, the US wants to see the amendment of the labour law passed through Parliament. The second condition entails visible improvement in the working environment in the RMG factories, and finally the third involves introduction of trade unions in the Export Processing Zones.
These are the key conditions that the US has given to Bangladesh in a letter to the Bangladesh Ambassador to the US, Akramul Qader, who on June 26 forwarded it to the Ministry of Foreign Affairs here.