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Despite Halting Progress, Bangladesh Keeps EU GSP Status

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Despite intense criticism of its factory safety and labor conditions, Bangladesh will not suffer any revision in its current status under the E.U.’s Generalized System of Preferences (GSP), reported E.U. Ambassador to Bangladesh William Hanna.

Rumors have swirled that, as a symbolic show of protest against Bangladesh’s crawling progress towards improved factory safety and labor conditions, the E.U. might pull its duty-free access to European markets, including apparel products. A member of the WTO since 1995, Bangladesh benefits from the E.U.’s “Everything But Arms” arrangement, which allows it duty free access for all exports, excluding arms and ammunition. And while the U.S. has suspended duty free access for Bangladesh until it improves factory safety, this has little effect on the garment industry since it only applies to goods like golf equipment, kitchen appliances and ceramics. Bangladesh’s garment industry has never qualified for duty free access to the U.S. market.

Some progress has been achieved, if haltingly. The Accord on Fire and Building Safety in Bangladesh (AFBSB) finally arrived at an agreement regarding the new inspection standards that will apply to all its signatory members. These standards largely apply to factory building safety with particular reference to fire and electrical ordinances. As AFBSB’s website explains, the new strictures are the result of a collaborative effort that involved input from several sources: the National Tripartite Plan of Action, the Alliance for Bangladeshi Worker Safety (ABWS) and the International Labor Organization. The final product is based on the existing Bangladesh National Building Code, albeit in thoroughly revised form.

Nevertheless, Hanna offered some pointed criticisms of Bangladesh’s schedule for reform. Specifically, he complained that it was adding much needed factory inspectors at too slow a pace and that the creation of a comprehensive database of garment factories must be developed more quickly.

Bangladesh’s $20 billion  garment manufacturing industry is heavily dependent upon its access to European markets. Despite its recalcitrant political troubles, Bangladesh continues to be a magnet for apparel suppliers. Its readymade garment exports climbed nearly 20 percent year-on-year during the first half of 2013. From July to December 2013, garment exports hit $11.93 billion, a significant improvement over the same period the previous year, which achieved $9.95. Exports of woven garments did particularly well, leaping 20.37 percent to $5.98 billion while knitwear exports increased by 19.55% to $5.95 billion. The Bangladesh government expects total garment exports this year to increase a little more than 12 percent to approximately $24 billion.

 

 

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