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More Progress Needed Before Reinstating GSP Eligibility for Bangladesh, U.S. Says

Thursday, April 24, 2014
Sandler, Travis & Rosenberg Trade Report

A joint federal agency statement April 23 indicates that Bangladesh needs to take additional steps before the U.S. will consider reinstating the eligibility of the country’s exports for tariff reductions under the Generalized System of Preferences.

The U.S. suspended Bangladesh from GSP in June 2013, following a building collapse that killed more than 1,000 workers, for what it said was the government’s insufficient progress in affording Bangladeshi workers internationally recognized worker rights. As a result, imports of otherwise GSP-eligible goods from Bangladesh are currently subject to most-favored-nation duty rates. However, the suspension does not affect most of Bangladesh’s exports to the U.S., 96% of which are apparel goods statutorily excluded from GSP treatment. GSP-eligible goods that Bangladesh does ship to the U.S. include tobacco products, sports equipment, china kitchenware and plastic articles.

According to the statement, the government of Bangladesh has made progress over the past year implementing an action plan that was presented by the U.S. and must be fulfilled before GSP benefits may be restored. For example, more than 140 unions have been allowed to register, a leading labor rights non-governmental organization that had been stripped of its registration was permitted to re-register, an ambitious plan for safety inspections and factory-level monitoring and remediation across the garment sector was agreed in collaboration with the International Labor Organization, the hiring of new labor inspectors has begun, and preliminary safety inspections have been conducted.

However, the statement adds, “there is much more work still to be done.” There continue to be concerns about basic worker rights protections under both Bangladesh’s labor law and its special export processing zone law. The government’s hiring of inspectors is lagging and the results of inspections need to be made publicly available on an easily accessible database. The government must also do more to ensure protection when workers face intimidation and reprisals for trying to organize, the statement says.

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