U.S. Trade Representative Michael Froman said a new agreement with Bangladesh will give the two countries a formal mechanism to address the serious labor, safety and worker rights issues that led to the Southeast Asian nation’s loss of U.S. trade preferences earlier this year.
This story first appeared in the November 26, 2013 issue of WWD. Subscribe Today.
The countries signed the Trade and Investment Cooperation Forum Agreement at a ceremony in Washington Monday.
In June, the U.S. said it was suspending Bangladesh’s trade benefits under the Generalized System of Preferences as of September. The U.S. cited pervasive garment factory safety problems, including two tragedies that claimed the lives of more than 1,230 workers, in addition to the failure of industry and government to allow Bangladeshi workers to exercise their rights to organize and bargain collectively in the apparel sector.
Apparel and textiles are not covered by GSP, which includes imports from Bangladesh such as tobacco, sports equipment and plastics products. But the suspension of preferences was widely seen as a move to bring about broader labor reforms in Bangladesh. Following the suspension of GSP benefits, the U.S. and Bangladesh signed the Bangladesh Action Plan in July, under which the President could consider reinstatement of the GSP benefits.
“The U.S.-Bangladesh relationship has certainly faced challenges in recent times,” Froman said. “Our decision to suspend Bangladesh’s eligibility for GSP preferences was not an easy one, but the TICFA that we’re signing today offers an opportunity to make progress on difficult issues and we know that the government of Bangladesh is focused on addressing the challenges in the area of workers’ rights and worker safety.”
The TICFA is seen as a formal forum to address measures outlined in the action plan relating to fire and building safety in the garment industry, in particular, as well as improving union organizing rights in the apparel and shrimp sectors and exporting processing zones.
“We’re committed to working with you to help ensure that workers in Bangladesh are able to exercise their rights and that all stakeholders, including Bangladesh employers and foreign buyers, are involved in efforts to improve worker rights and worker safety,” Froman said.
Akramul Qader, Bangladesh’s Ambassador to the U.S., called the agreement an “historic moment” that was long overdue.
“This is an opening of a new chapter in U.S.-Bangladesh relations,” he said. “I believe this agreement could ensure better cooperation [between] our two countries, with renewed commitment and enhanced understanding. The countries will henceforth sit together and devise a means to settle outstanding issues like the expiration of the GSP preferences for Bangladesh products in the U.S. market, as well as future prospects of duty- and quota-free access of our exportables in the U.S.”
Shortly before the TICFA was signed in Washington, businesses in Dhaka waited for the Chief Election Commissioner’s pronouncement late on Monday night that the 10th parliamentary election would be held Jan. 5, bringing the country and the business sector into a crucial stage.
The opposition Bangladesh Nationalist Party and its 18-party alliance deepened their combative stand, declaring a 48-hour blockade of road, rail and waterways starting Tuesday.
Garment manufacturers who have been shrugging off the effect of such shutdowns are apprehensive of how this will affect business.
Police officials told WWD that reports of vandalism from factories have continued, largely in protest against the wage structure agreed upon earlier this month, which included a minimum wage of 5,300 taka, or $68, a month, while the workers are demanding 8,100 taka, or $104, monthly.