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US: Bangladesh must do more to regain trade perk

February 11, 2014

WASHINGTON (AP) — Bangladesh needs to do much more on improving labor standards to win back duty-free trade benefits suspended after the global textile industry’s worst disaster, U.S. officials said Tuesday.

Washington suspended the benefits last June, two months after the collapse of the Rana Plaza factory building in Dhaka that killed 1,129 people. The disaster put a grim spotlight on low wages and lax safety in the impoverished nation’s lucrative apparel business that exports nearly $5 billion annually to the U.S.

Among those providing written testimony to a Senate Committee on Foreign Relations hearing on Bangladesh was Reba Sikder, 18, who was pulled from the rubble of the Rana Plaza after being trapped for two days. She recounted her struggle to recover.

“What has been most debilitating is the trauma and panic I still feel, which has made it virtually impossible to find work,” said Sikder, who attended the hearing, but did not speak in person. “I feel afraid just looking at tall buildings and I am scared to go inside. I worry there will be another collapse.”

Senior Labor Department official Eric Biel said that late last month, the U.S. conveyed to Bangladesh that despite progress in some areas, it had not done enough under an action plan laid out by Washington for restoration of the Generalized System of Preferences, or GSP, that gives duty-free on some 5,000 products.

Biel said there’s a “great deal” to do on implementing important elements of the plan, including on allowing unions, a process which he said was at a “very early stage.” He the U.S. in cooperation with international partners needs to continue “to hold the government of Bangladesh’s feet to the fire.”

The next review on restoring GSP is due in May.

Biel said so far relatively few safety inspectors have been hired by the government and they still cannot inspect dedicated export processing zones, where unions also remain off-limits. Biel further criticized severe restrictions on collective bargaining and recent reports of union organizers being harassed.

Committee chairman, Democratic Sen. Robert Menendez, was skeptical of reported progress by Bangladesh, saying that although nearly 100 unions have been able to register, only 40,000 of 3 million garment industry workers was represented.

He said factory owners, like government, needed to appreciate the reputational costs of scrimping on safety and labor standards.

“I hope factory owners understand that it would be very difficult to sell clothing made in Bangladesh if it’s on the blood of workers,” Menendez said.

Lawmakers, however, questioned whether GSP provides much leverage. It covers less than 1 percent of Bangladeshi exports, not including garments, and that industry has continued to prosper in the past year.

The hearing also examined politics inside Bangladesh, and Democratic Sen. Dick Durbin took the government of Prime Minister Sheikh Hasina to task for pushing Nobel peace laureate Muhammad Yunus out as managing director of the Grameen Bank, a micro-lender credited with helping many Bangladeshis out of poverty.

Durbin described it as a “crass political move to punish him in some way and sadly to punish millions of people who depend on that bank to survive.” Top U.S. diplomat for South Asia, Nisha Biswal, echoed that sentiment, saying the bank’s mission in helping poor women and families was under threat.

“That is a deep shame and travesty,” she said.

The Bangladesh Embassy in Washington did not respond immediately for a request for comment.

Yunus has been at odds with Hasina for several years after an abortive attempt to launch political party. He was ousted from the bank in 2011 after the High Court ruled he violated retirement laws. The bank is now being brought under closer central bank supervision.

Biswal said the U.S. has gained little traction in its efforts to urge a resolution in Bangladesh’s current political standoff after Jan. 5 elections that were boycotted by the main opposition party and preceded by violence in which more than 100 people died. She said the flawed elections could have “serious ramifications for stability in Bangladesh and the region.”

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