Rep. George Miller Says Strong Evidence to Revoke Bangladesh Trade Benefits

Safety issue brings country's GSP status into question.

WASHINGTON — Rep. George Miller (D., Calif.) said Friday the evidence to withdraw U.S. trade benefits to Bangladesh is “overwhelming,” in light of two recent tragedies in the country’s apparel industry and a long history of worker and labor rights violations, although he noted a question remains about whether to give the Southeast Asian nation a window of time to meet stringent benchmarks to retain the preferences.

This story first appeared in the June 3, 2013 issue of WWD.  Subscribe Today.

Miller held a call with journalists after his five-day visit to Bangladesh, where he witnessed the impact of the Rana Plaza building collapse that claimed 1,129 lives and met with survivors, labor groups and unions, industry associations and government officials.

The U.S. has been intensifying pressure on the government of Bangladesh in the wake of the Rana Plaza catastrophe and an earlier fire at Tazreen Fashions that killed 112 garment workers. The Obama administration is reviewing whether to consider withdrawal, suspension or limitation of trade benefits under the U.S. Generalized System of Preferences. A decision is expected at the end of this month.

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The GSP program in the U.S. does not provide duty-free benefits for apparel, Bangladesh’s largest export, but loss of GSP benefits would be seen as a loss of confidence by the U.S. government in the country and could impact future business there. In 2011, U.S. imports from Bangladesh under GSP totaled $26.3 million, according to the U.S. Trade Representative’s office. Among the leading GSP imports from Bangladesh were sports equipment, china kitchenware, plastic articles and tobacco.

“I think the current review doesn’t lead you to any other conclusion than that you should withdraw GSP because of foot dragging [on the part of the Bangladesh government], of not complying with basic law, of not meeting timetables, of not meeting labor standards,” Miller said. “That is the basis for granting them the privilege of GSP. So today the evidence would be overwhelming that you should withdraw GSP status from Bangladesh.”

Miller, senior Democrat on the House Education and Workforce Committee, noted that he has no plans to introduce punitive legislation, adding that the U.S. review of Bangladesh’s GSP benefits serves as a powerful tool. However, he said the question must be raised about whether the recent tragic events have “jarred Bangladesh to the reality that they need to have compliance” and whether the U.S. should give the country an opportunity to meet certain benchmarks for an extension of GSP benefits.

“Everybody tells you that they understand that this is a defining moment, either for the private brands or for the national brand of ‘Made in Bangladesh,’ and everyone is willing to change — the ministers in the government, members of Parliament, the manufacturers’ association all tell you that this is an absolute must and that they recognize it.…The question is, does that present an opportunity to give them a few months here to in fact take those actions? I think you have to set out very, very stringent benchmarks, based upon history, based upon the law and based upon the international requirement. They either meet them or they don’t. If they don’t, there is nothing more to discuss, and GSP should be taken away.”

Miller also reiterated his criticism of Gap Inc. and Wal-Mart Stores Inc., which have refused to join the binding international Bangladesh fire and safety accord that 42 retailers and brands have signed, and are instead leading a group of North American companies to formulate their own action plan. Some U.S. firms have been hesitant to sign the international accord because it includes legal liabilities to which they couldn’t agree. Gap had said it was within a matter of a few words of signing it, but has not done so.

Puma became the latest company to sign the accord on Friday. Thirty-eight major European retailers and brands — including H&M, Benetton, Inditex, C&A, Primark, Carrefour and Marks & Spencer — have now signed the accord. Three U.S. companies — PVH Corp., Abercrombie & Fitch and Sean John — have also signed the agreement, in addition to Canada’s Loblaw Cos., owner of the Joe Fresh brand.

Miller called out Gap and Wal-Mart for choosing not to sign the binding agreement and forging their own path with the alliance of industry groups and other companies.

“I think there is universal recognition that these problems began in a system designed by major retailers and brands to put the most cost pressure possible on factories by either threatening to leave those factories and go to another factory, or go to another country and take the work with them,” Miller said. “That is how the system was designed. Now I see a recognition with a part of those brands [the 43 that have signed the international accord] that a very substantial dramatic and enforceable change has to take place.…But you have Wal-Mart and the Gap, who are still insisting that they would like to construct their own system, and when you look at their history, the factories they have worked in, it makes you very nervous. And I don’t think it can be left to the simple construction of the industry by itself.”