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U.S., Bangladesh Hold First Trade and Investment Forum

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On April 28, senior trade representatives from the United States and Bangladesh held the first meeting of the United States-Bangladesh Forum on Trade and Investment Forum, established under the Trade and Investment Cooperation Forum Agreement (TICFA).

The purpose of the Forum is to identify barriers to increasing bilateral trade and investment and collaboratively find solutions to these challenges. Both governments jointly reaffirmed their commitment to increase bilateral trade and investment as well as to address worker rights and worker safety issues in Bangladesh.

During the Forum, a number of trade issues were specifically addressed including: investment rules; intellectual property protection; tariffs on fire safety and prevention equipment; fumigation requirements for cotton imports into Bangladesh and regional economic development and cooperation in the South and Southeast Asia region. The Forum also appraised Bangladesh’s efforts to date in addressing the worker rights and worker safety issues in the Generalized System of Preferences (GSP) Action Plan. Additionally, the U.S. pushed for the creation of a Labor Affairs Committee and a Committee on Women’s Economic Empowerment.

The Forum praised the work of private sector initiatives for its collective attention to the issue of worker safety in Bangladesh, including fire safety and building safety issues. During the TICFA discussions, the Bangladesh government announced plans to eliminate the country’s tariffs and other charges on fire safety equipment — such as, sprinklers, fire doors and electrical equipment — making the price tag of infrastructural improvement less costly for factories.

While the U.S. and Bangladesh have close commercial and political ties, there has been some tension between the two nations since the Rana Plaza tragedy one year ago. In June 2013, the Obama administration suspended Bangladesh’s GSP status in response to revelations that garment factories were maintained in wretchedly unsafe conditions. As a consequence, some goods that were previously covered under GSP, which were eligible for most-favored-nation duty rates, became subject to steep tariffs. However, the suspension was largely symbolic since it has little effect on the garment industry; 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. In fact, 96 percent of all apparel goods are exempt from the U.S.’s GSP status.

Just last week, the U.S. government issued a statement that, despite withholding a reinstatement of Bangladesh’s GSP status, it still acknowledges some genuine progress toward reform. “In the last year, the government of Bangladesh has made progress in some important respects. For example, Bangladesh has allowed over 140 unions to register, permitted re-registration of a leading labor rights non-governmental organization that had been stripped of its registration, agreed to an ambitious plan for safety inspections and factory-level monitoring and remediation across the garment sector in collaboration with the ILO, begun the hiring of new labor inspectors, and conducted preliminary safety inspections.”

The U.S. government, however, still considers Bangladesh’s improvements insufficient to justify restoring it to its former preferential trade status. “But 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 Bangladesh 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 of Bangladesh must also do more to ensure protection when workers face intimidation and reprisals for trying to organize. Addressing these issues would help workers secure safer working conditions and better wages and enable Bangladesh to realize its full economic potential.”

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