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EU Threatens to Pull Bangladesh Free Trade Benefits

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If certain labor issues don’t shape up in short order, Bangladesh could start paying at least 12.5% duty on its exports to the European Union.

For now, Bangladesh enjoys free access to the EU under the bloc’s Everything But Arms (EBA) program, which, as it’s named, allows all goods except weaponry to be imported to the EU duty free.

However, a joint letter from three European Commission bodies to the Bangladesh embassy in Brussels threatened to pull that privilege if labor conditions aren’t further improved.

The EU said Bangladesh needs to make amendments to its 2013 Labour Act to address freedom of association and collective bargaining, conduct an immediate investigation into anti-union discrimination and reinstate any workers who were wrongfully dismissed.

“This will be essential for Bangladesh to remain eligible for the EBA regime. Without such progress, our monitoring could eventually lead to the launch of a formal investigation, which could result in temporary withdrawal of preferences,” the EU letter explained, according to The Daily Star.

The EU’s move comes after global labor rights unions called on the EU last month to reconsider Bangladesh’s GSP eligibility as workers still aren’t subject to fair conditions.

Workers in Bangladesh went on strike in December demanding better pay, and many missed work for a week in protest. The result, instead of the higher wages they sought, was that more than 1,500 workers were let go when employers deemed the strike illegal.

The EU also said it continues to receive letters reporting harassment, and repression and restrictions of trade unions and their activities. The International Labour Organization (ILO) has also expressed concern that the recent handling of workers’ activities and protests mark a regression in the efforts toward improving labor rights.

In response, Bangladesh commerce minister Tofail Ahmed told The Daily Star, “The labor unions in Bangladesh have been enjoying full freedom. We have improved the labor standards a lot.”

Regardless of which side is more correct, there’s a divide between Bangladesh and the EU that would definitely impact the garment sector in Bangladesh should the trading relationship change.

“It is of the utmost importance that Bangladesh address this situation with concrete and time bound actions in particular by implementing the recommendations of the ILO committee on the application of standards as a matter of urgency,” the EU Commission joint letter said, according to The Daily Star.

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