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11 September, 2015 00:00 00 AM
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The suspension of GSP, instead of helping Bangladeshi workers, harmed the poor of the country and damaged vital US trade relations with Bangladesh, a key ally and a large friendly Muslim country, said the HF in an analytical report

GSP suspension to adversely impact on the economy

Omar Faruque

An influential think-tank in the United States (US) has called upon the Obama administration to immediately repeal the recently imposed trade sanctions on Bangladesh exports.  Urging for reinstatement of GSP (generalised system of preferences) facilities for Bangladesh, it has also appealed to the US government to allow duty-free and quota free access for ready-made garment (RMG) products of the country to help its workers.
Criticising the suspension of GSP facilities the Washington DC-based Heritage Foundation (HF) said on its website recently that " President Obama's move to punish Bangladesh by imposing trade sanctions is misplaced." The conservative think-tank  also urged the Congress to act, if the administration of President Barack Obama does not act to repeal these sanctions.
The suspension of GSP, instead of helping Bangladeshi  workers, harmed the poor of the country and damaged vital US trade relations with Bangladesh, a key ally and a large friendly Muslim country, said the HF in an analytical report. It also pointed out that the Congress should reinstate GSP facilities for Bangladesh products so that the US consumers could get essential things at cheaper prices.
According to the HF this move is punitive and off-target as in reality, the GSP covered imports of only 118 products worth $ 35 million from Bangladesh in 2012. It is less than 1.0 per cent of $ 5.0 billion worth of goods imported from Bangladesh during the year.   It said if the administration and Congress really wanted to help workers in Bangladesh, Congress should act to cut tariffs on textile imports into the US from the country. According to the sources, Bangladesh exported over $ 4.0 billion worth of RMG products in 2012 to the US, paying an average duty of nearly 16 per cent on those products. "Reducing or eliminating this duty would directly benefit workers in Bangladesh increasing employment and encouraging economic growth," said the HF.
"If  President (Obama) truly wants to improve the lives and well-being of workers, he should encourage free trade, work to lower barriers, and increase economic dialogue with Bangladeshi authorities," the HF added. Instead of specifically targeting the garment industry, removing GSP privileges arbitrarily punishes industries that are unrelated to the recent tragedies. Over 30 per cent of covered products in 2012 are agricultural goods and inputs. More than 50 per cent of those who live in rural areas are considered poor, and rural workers make only about half as much per year as their urban counterparts.
Yet it is these workers - not the garment industry - who will bear the burden of new tariffs. These punitive actions will only hurt the poorest Bangladeshis and are bound to further depress employment in a country that is already suffering.   Meanwhile, Seventeen North American retailers  reportedly on July 10, 2013 set up a forum called 'The Alliance for Bangladesh Worker Safety' to ensure safety standards and trade union rights at RMG factories in the country to overcome the outcry which developed after the Rana Plaza collapse.
The North American retailers’ move came after a similar forum was launched on July 9, 2013 by 70 big retailers of the 27 nations European Union styled as Bangladesh
Fire and Building Safety Accord for RMG plants. These
steps would however require garment factories in Bangladesh to become affiliated with one or another
forum for inspection and verification to be eligible for exporting apparels which will be made in their plans to the buyer country.
US Senators George Mitchell and Olympia J Snow were instrumental to work out the scheme with support from the Bipartisan Policy Center - a public policy think-tank based in USA.   Meanwhile, the European Union (EU) assured Bangladesh of not following the United States (US) regarding the Generalized System of Preferences (GSP) privileges, said M Atiqul Islam, President of BGMEA recently. "GSP is a big challenge for Bangladesh although EU assured us of not following the US about GSP facilities," Atiqul told a Meet The Press at Dhaka Reporters Unity (DRU).
Atiqul, however, said the multi-billion dollar readymade Garment (RMG) industry is now passing through a
critical juncture as conspiracies both at home and abroad are being hatched in the sector. "Of course the sector is suffering from conspiracies. A section has been hatching conspiracies in a bid to drive away its investment to the country's competitors," he said. "Bangladesh has competitors in the sector and thus our neighboring countries would never want the sector to grow," said the BGMEA president.   The office of the United States Trade Representative (USTR) suspended the GSP facility after a group of influential US congressmen created pressure to strip Bangladesh of the facility, protesting lax monitoring of factory standards that lead to tragedies like Tazreen factory fire and Rana Plaza collapse.   
Development of garments industry in  Bangladesh is directly linked with the development of the economy of the country and also the development of the women folk especially of the rural areas. Now more than 80% garment workers are female who have joined this industry coming from the villages. Thus this industry is playing the vital role in poverty alleviation and women empowerment especially in  rural Bangladesh.
Thus, the US should immediately withdraw its decision regarding the suspension of GSP in Bangladesh.     

The writer is an eminent journalist, traveler, social researcher, editor of the English weekly Dhaka Post, chief editor of the Fortnightly Tritiya Bangla, advisory editor in the New York based weekly Probash Barta and also the overseas correspondent of some news organizations

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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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