U.S. threatens to yank trade preferences for Bangladesh

WASHINGTON – The recent fatal collapse of the Rana Plaza clothing factory in Bangladesh, which killed 1,129 workers forced inside to toil making clothes for firms that sold to U.S. and European retailers, has forced the Obama administration to decide by the end of this month whether to yank trade preferences for Bangladesh.

That June 6 announcement by Assistant U.S. Trade Representative Lewis Karesh responds to a six-year-old AFL-CIO complaint about the South Asian nation’s labor practices in industries that export to the U.S.

“Despite our many efforts, beginning in late 2012 the USTR grew increasingly concerned the worker rights situation in Bangladesh was in fact deteriorating and concluded the situation warranted consideration of possible withdrawal, suspension, or limitation of Bangladesh’s trade benefits under the Generalized System of Preferences (GSP),” Karesh told the Senate Foreign Relations Committee. GSP is the trade structure that lets Bangladeshi products into the U.S. duty-free.

USTR announced in January it is considering yanking Bangladesh’s GSP rights. That was “to to make stakeholders aware of the seriousness of our concerns and the need for action by the government of Bangladesh.” The AFL-CIO then reiterated that the U.S. government should yank GSP from Bangladesh.

But yanking GSP trade preferences may have little overall impact. Karesh said GSP covers only one percent of the $5 billion in goods that Bangladesh exports to the U.S. GSP does not cover textiles and clothing trade.

The Rana Plaza collapse occurred after workers, for separate employers, were ordered back into the plant even though local supervisors warned of unsafe conditions and workers went back in fear. The lights went out, the building collapsed, and workers died in the worst disaster in world garment industry history.

Most of the dead workers were young women, though some were family members and the average wage, the lowest in the world, was $38 monthly.

The AFL-CIO complaint against Bangladesh originally covered lack of labor rights and repression of unions and collective bargaining, federation trade specialist Celeste Drake told the senators. The fed later added health and safety problems, lack of enforcement of safety laws and harassment and violence – including murder – of trade unionists and general Bangladeshi governmental inaction to the complaint.

Since the building crash, both testified, most large U.S. and European retailers that buy clothes from Bangladeshi firms signed a compact for a new tougher job safety and building safety code in the South Asian nation and enforce it on their suppliers. She slammed two big ones, Walmart – the largest – and The Gap, that have not.

And voluntary action is meaningless without government enforcement, Drake said – which the Bangladeshi governments have refused to undertake. She also noted that firms signing a voluntary pact may withdraw from it at any time.

“If the (Bangladeshi) government, factory owners, and international brands cooperate to make profound reforms to ‘business as usual’ in Bangladesh, committing to enforceable standards for workplace safety and worker rights, it can be the point at which ‘brand Bangladesh’ begins to grow in stature,” she said.

“If instead, this moment is not seized, and a flurry of unenforceable promises are made in order to obscure the fact that little will change for Bangladesh’s workers, this moment will not be remembered, but will simply become another in a long line of preventable tragedies for which the world’s most vulnerable bear the costs.”

But workers can’t do it alone, Drake told lawmakers. Governments, including the U.S., and the big retail buyers of Bangladeshi clothes must follow through with determination. “The U.S. government must…limit or suspend Bangladesh’s benefits under GSP to signal to Bangladesh that its lack of progress will no longer be tolerated and that substantial changes to its labor regime are necessary,” she said.

Yanking GSP from Bangladesh would also signal other nations that exploit their workers for U.S. retailers – Drake cited the Philippines, Iraq, Georgia, Fiji and Uzbekistan – that such practices will run afoul of the U.S. government.

“It is worth noting three of the four worst disasters in the history of the global apparel industry have happened in the last eight months, two of them — Rana Plaza and Tazreen Fashions — in Bangladesh,” she said. The Tazreen fire in November killed 112 workers, all making clothes for Walmart, which ignored worldwide protests afterwards. There have been 44 fires since then in Bangladesh clothing plants.

“Bangladesh’s labor practices and working conditions have been at issue for more than 20 years, and yet these recent catastrophes leave no doubt that the current approach — weak to non-existent governmental efforts combined with voluntary corporate compliance programs — is an abject failure,” Drake said.

In criticism of Walmart and the Gap, Drake added U.S. brands “must also join in the binding” Accord on Factory and Building Safety in Bangladesh “to protect the very workers whose daily efforts create the brand’s products. Voluntary compliance plans, which do not work, are not an acceptable substitute.”

Photo: In Bangladesh, rescuers take a woman to safety after she was injured in a factory collapse. A.M. Ahad/AP


Mark Gruenberg
Mark Gruenberg

Award-winning journalist Mark Gruenberg is head of the Washington, D.C., bureau of People's World. He is also the editor of the union news service Press Associates Inc. (PAI). Known for his reporting skills, sharp wit, and voluminous knowledge of history, Mark is a compassionate interviewer but tough when going after big corporations and their billionaire owners.