US mulls withdrawal of Bangladesh trade privileges

AP News
Posted: Jun 06, 2013 6:03 PM

WASHINGTON (AP) — A prominent Democratic senator Thursday pushed for suspending duty-free privileges to Bangladesh, saying it would send a strong signal that the United States is serious about protecting workers after hundreds died in the global garment industry's worst accident.

American retailers that source products from factories in Bangladesh also came under pressure at a Senate hearing to adopt common safety standards to prevent a repeat of the April 24 collapse of Rana Plaza in Dhaka that killed 1,127 people.

"No one will want to wear a piece of clothing made in Bangladesh if it's on the blood of workers," New Jersey Sen. Robert Menendez, chairman of the Senate Foreign Relations Committee, told a hearing on labor conditions in the South Asian nation.

After yearslong U.S. government review, President Barack Obama will decide by the end of June whether to curtail Bangladesh's trade privileges. Under the Generalized System of Preferences, Bangladesh, one of the world's poorest nations, can export nearly 5,000 products duty-free to the U.S., its leading market.

Bangladesh is anxious to keep that benefit. While the GSP covers less than 1 percent of Bangladesh's nearly $5 billion in exports to the U.S. and doesn't include the lucrative garment sector, it could deter American companies from investing in Bangladesh and sway a decision by European Union, which is also considering withdrawing GSP privileges. EU action could have a much bigger economic impact, as its duty-free privileges cover garments.

Bangladesh's ambassador to the U.S., Akramul Qader, who attended the hearing but did not testify, defended his government's record, saying it had improved worker rights and increased the minimum wage. Authorities have closed 20 unsafe factories since the Rana Plaza disaster, he said.

"We are trying our best," Qader said.

Sen. John McCain, R-Ariz., cautioned against such hasty U.S. action, warning it could ratchet up unemployment in an impoverished country.

But Celeste Drake, a trade and policy specialist at the AFL-CIO, was scathing about Bangladesh's failure to respond to a string of deadly industrial accidents.

"What's the body count that you need to really make changes?" she told lawmakers. "We are well beyond what anyone would need to see as evidence that the government's very feeble efforts and the voluntary compliance programs of the corporations simply are not working."

The AFL-CIO filed the petition seeking withdrawal of GSP benefits in 2007, which was expedited late last year amid concern from U.S. lawmakers over deteriorating labor rights and the April 2012 killing of prominent labor activist, Aminul Islam — a case that has not been solved.

"Had there been a union representative on the ground at Rana Plaza, that tragedy would not have happened," the top U.S. diplomat for South Asia, Robert Blake, told the hearing.

Blake noted some progress by Bangladesh in improving labor rights, including the registration of 27 new trade unions since September 2012. He said Bangladesh has given assurances its parliament will pass amendments this month to its labor law to address freedom of association and worker safety. But he added, "There's a great deal of corruption and governance challenges that still need to be met."

Eric Biel, the Labor Department's acting associate deputy undersecretary for international affairs, said there currently were less than 100 government inspectors in Bangladesh to monitor between 4,000 and 5,000 factories that employ some 4 million people, 80 percent of them women.

Democratic lawmakers criticized U.S. retailers for not joining the more than 40 mostly European companies that have adopted a five-year, legally binding contract that requires them to help pay for fire safety and building improvements in Bangladesh. While the U.S. companies PVH, Sean John and Abercrombie & Fitch have signed up for the accord, many other leading American brands, including the Gap, Wal-Mart, Target, and JCPenney, have not.