US for harsh steps on violation of labour rights, fire-building standards for duty-free access

Highlights: TBS

The United States has asked Bangladesh to take harsh measures on violations of labour rights, fire and building standards including increasing fines and other sanctions and the appointment of inspectors with sweeping powers.

The recommendations came in an 11-point action plan aimed at improving labour conditions in Bangladesh. The US presented the plan at the "US-Bangladesh Ticfa Intersessional Meeting" held in Dhaka on Sunday (21 April) under the Trade and Investment Agreement Framework (Ticfa).

If these action plans are implemented, it will pave the way for Bangladesh to regain the General Scheme of Preference (GSP) and get loans from the United States International Development Finance Corporation.

Speaking to The Business Standard following the meeting, Senior Secretary of Commerce Tapan Kanti Ghosh, who led the Bangladesh delegation at the meeting, said, "If we improve the labour rights situation in Bangladesh, we can get the benefits of duty-free and quota-free market access to the US."

The commerce secretary – referring to  what was communicated by US' delegation team leader Brendan Lynch, also assistant USTR representative for South and Central Asia and US Ambassador Peter Haas – said, "We can also reap the benefits of the United States International Development Finance Corporation funds."

Bangladesh Knitwear Manufacturers and Exporters Association Executive President Mohammad Hatem told TBS, "When workers commit violence, police typically file a case as the plaintiff and conduct investigations. If the US demands action against the police in such cases, it would not be acceptable. This would result in exempting the workers from accountability for their actions."

He said that neither the government nor BGMEA and BKMEA support unfair labour practices. "We also want punishment against any owner or manager found guilty of such practices. However, in this case, it is necessary to first identify which are the unfair labour practices."

"If workers vandalise our factories, set fires, or assault our middle management, appropriate actions can be taken against them. If the US makes such a provision in its own country, then we are also willing to accept it," he added.

The BKMEA president further said employers have already submitted a proposal to the Ministry of Labour advocating for the relaxation of the mandatory requirement of obtaining the signatures of at least 20% of the workers for the formation of a trade union.

"The US has urged for the removal of current restrictions on workers calling strikes, deeming them as excessive. No country worldwide approves of illegal strikes by workers," he added.

Last November, a delegation from the European Union also expressed its displeasure over the labour situation in Bangladesh. They also made several recommendations to Bangladesh on the protection of labour rights, the implementation of which will depend on Bangladesh's access to GSP Plus benefits in this major market after LDC graduation.

Highlights of the action plan

In the "Bangladesh Labor Action Plan", the US said Bangladesh has to take "meaningful actions to prevent and hold those responsible accountable for acts of violence and harassment against union organisers, workers and legal protest activities."

It also asked that criminal charges against labour activists be either dropped or resolved.

The US further asked the government to hold accountable factory owners, management and private individuals responsible for violating labour rights under the Bangladesh Labour Act and to investigate allegations about such violations.

It further asked that the Bangladesh Labour Act (BLA) be amended in consultation with the International Labour Organization to maintain consistency with international labour laws.

Among the amendments, it asked that labour unions be allowed to have access to the official number of workers when attempting to form a union, alongside a stipulation allowing for legal action to be taken against employees who fail to maintain such a register.

Another amendment called for eliminating "excessive" restrictions on the right to strike and severe penalties for illegal strikes.

The US also asked the government to "take measures to ensure workers in the export processing zones [EPZs] can fully exercise their rights to freedom of association and collective bargaining."

In this regard, the US asked that EPZs be brought under the BLA. The Ministry of Commerce has promised that the labour Law will be implemented in EPZ by June 2025.

A BGMEA director, seeking anonymity, told TBS, "In the last decade, Bangladesh has made huge strides in the ready-made garments (RMG) sector. We have invested heavily in technology along with green factories, which highlights our commitment to best practices in labour relations."

Despite this, there have been repeated attempts to bring in the issue of trade unions and use it as a weapon when topics of GSP or duty-free market access come up, he added.

The trade unions operating in Bangladesh operate within the framework of the country's laws, enjoying full freedom, he said. However, sometimes we have seen factories falling victim to disputes between different unions and when something unwarranted happens, the blame is surely put on the factories.

"Despite these stringent regulations from the EU and US, we've increasing work orders. Such confidence in our industry would not have materialised if the allegations being raised were true," he said.

He further said, "In many cases, trade unions are politically controlled, raising doubts about their effectiveness in addressing workers' rights. Additionally, trade union leaders are often perceived as puppets, controlled by external entities with no direct connection to the factories in question. 

"Instead of this scenario, we advocate for programmes focused on educating workers about their rights and training trade union leaders to become more effective representatives in collective bargaining," he added.

Regaining GSP facility 

After the Rana Plaza collapse in 2013, the US suspended Bangladesh's GSP benefits and gave a 16-point action plan as a condition for its reinstatement. 

Bangladesh later said it had implemented the recommendations and demanded reinstatement of the GSP facilities, but the US repeatedly rejected it and suggested further improvements.

In 2017, the government decided not to demand the reinstatement of the GSP. Since then Bangladesh has been demanding duty free, quota free market access instead of GSP facility.

An official of the Ministry of Commerce, who was present at the meeting, told TBS that the US did not directly say anything about the GSP or duty free market access facility if the action plan provided by the United States is implemented. 

"They [US] said their GSP policy is in the US Congress. Regaining GSP will be easier if we implement them," said the official. 

He said, in the Ministerial Conference of WTO held in Abu Dhabi, it was decided that even after the LDC graduation, the countries can give GSP benefits for three years if they want. As a result, if the GSP facility is reinstated, Bangladesh will be able to enjoy it for five years.

Duty-free, quota-free market access 

During the meeting Bangladesh was expecting to get duty-free, quota-free market access for Bangladeshi apparel produced from US cotton to its market.

The labour secretary mentioned that Bangladesh has abandoned the double fumigation method for importing cotton from the US and, in exchange, has requested duty-free access for garments made from US cotton. 

However, an official present at the meeting said that no confirmation was received from the US regarding this request. 

According to the Bangladesh Textile Mills Association, the market share of US cotton in Bangladesh was 9% two years ago. It has now increased to about 14% after the abolition of double fumigation.

In this context, Bangladesh decided to present a strong argument that the US should provide duty-free export facilities to RMG products manufactured in Bangladesh using cotton imported from the US.

Bangladesh's apparel exports to the US are decreasing despite the increase in cotton imports from the country. 

According to data published by the Office of Textiles and Apparel (OTEXA) on 4 April, Bangladesh's garment exports to the US were $1.18 billion in January-February, which is 19.24% less than the same period last year. In January-February last year, the amount was $1.46 billion.

The US imported 395.69 million square metres of apparel items from Bangladesh in the January-February period this year – which is about 12.79% lower than the 453.73 million square metres shipped in January-February of 2023.

Registration cost of pharma products 

A commerce ministry official told TBS that a pharmaceutical company in Bangladesh has proposed to reduce the cost of registration of pharma products as a less developed country by highlighting that it costs more than $6 million to register five products with the US Food and Drug Administration. 

The United States Trade Representative (USTR) has given assurance regarding this proposal, said the official.  

During the meeting's briefing, the commerce secretary mentioned Bangladesh's proposal to transfer technology for agricultural sector development as a least developed country, which was also accepted. 

The USTR appreciated Bangladesh's Intellectual Property Acts but emphasised the need for better implementation, he added.