US leaves out Bangladesh from GSP

Bangladesh has been left out of the United States’ generalized system of preference (GSP).

The United States has renewed trade preferences for 122 nations around the world, but Bangladesh has been excluded from the list.

US President Barack Obama signed the Trade Preferences Extension Act on June 29, authorising the generalised system of preferences (GSP) through 2017, according to a notice posted by the US Customs and Border Protection.

The new GSP programme will make trade benefits retroactive to July 31, 2013.

Obama suspended Bangladesh from GSP in June 2013 based on Bangladesh’s failure to meet statutory eligibility requirements related to worker rights. 

After two industrial disasters – Tazreen Fashions fire and Rana Plaza building collapse, the US suspended GSP for Bangladesh in June 2013, citing serious shortcomings in labour rights and workplace safety.

An interagency review led by the United States Trade Representative (USTR) had earlier concluded that while Bangladesh made progress over the last year to address fire and building safety issues in the garment sector, further progress is needed.

But, further progress is needed to get back the generalised system of preferences, the USTR said.

GSP is a trade scheme under which the US allows import of more than 5,000 goods from 122 least developed and developing countries with lower or zero-duty benefit.

The US introduced the GSP in 1976 under the US Trade Act of 1974. However, the GSP scheme has remained suspended for all beneficiary countries since July 31, 2013.

In that review USTR chief Michael Froman said there is more work to do, building on the collaboration between the government of Bangladesh, private sector stakeholders, and the International Labour Organisation, to address the concerns about factory safety in the apparel sector.

Froman also urged the Bangladesh government to accelerate its efforts to ensure workers’ rights and to take measures to address continuing reports of harassment of and violence against labour activists who are attempting to exercise their rights.

In 2012, the total value of US imports from Bangladesh under GSP was $34.7 million; the top GSP imports from Bangladesh included tobacco, sports equipment, porcelain china, and plastic products.

The US companies are losing $2 million a day since the suspension of the scheme for all countries, according to American Apparel and Footwear Association.

The January USTR review also said there has been little progress in advancing the labour law reforms, including changes to ensure that workers are afforded the same rights and protections in export processing zones as in the rest of the country.

Under the general supervision of the Bangladesh government, more than 2,000 initial safety inspections of factories were completed in the garment sector over the last year, most by teams organised by private sector initiatives, it said.

These inspections resulted in the closure of at least 31 factories, the partial closure of 17 additional factories, and the identification of needed remedial measures in hundreds more, the USTR said.

In fiscal 2013-14, Bangladesh exported goods worth more than $5.58 billion to the US, with 95 percent of them being garment products, which were subjected to 15.61 percent duty.