US Urges Labor Reforms at Bangladesh Trade Talks
Labor reforms dominated bilateral trade talks between the U.S. and Bangladesh last week in Dhaka.
At the seventh session of the United States-Bangladesh Trade and Investment Cooperation Forum Agreement (TICFA) council, freedom of association, collective bargaining and supporting worker rights were key issues for the Biden-Harris administration.
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The U.S. and Bangladesh signed the TICFA agreement in 2013, aiming to fast track key trade and economic issues. Bilateral trade between the partners has doubled in the decade since to more than $10 billion.
The meeting was co-chaired by Brendan Lynch, acting assistant United States Trade Representative for South and Central Asia, and Tapan Kanti Ghosh, secretary of the commerce ministry for Bangladesh. Each nation’s delegation included representatives from trade, labor, intellectual property, and other relevant agencies.
The U.S noted Bangladesh’s efforts towards reforming labor laws, as well as actions to remove the long-standing cotton fumigation requirement for U.S. cotton exports.
However, U.S. officials said Bangladesh isn’t doing enough to implement and enforce labor laws to protect workers’ rights to freedom of association and collective bargaining, a key requirement for the Biden-Harris administration.
Bangladesh’s wish list, on the other hand, included the reinstatement of the Generalised System of Preferences (GSP) from the U.S, which was suspended in June 2013, after the Rana Plaza collapse killed more than 1,100, and the 2012 Tazreen fashions fire killed 110.
Discussions about zero duties for apparel exports using imported U.S cotton were also on the table. Approximately 14 percent of the cotton used to manufacture garments in Bangladesh is imported from the U.S.
“The U.S remains our single largest export destination, with more than 92 percent of these exports being apparel. It is a significant market,” said Mustafizur Rahman, distinguished fellow at Centre for Policy Dialogue (CPD), a think tank in Dhaka. “After each TICFA, Bangladesh points out that we have met all 16-points in the requirements detailed for GSP that were put in 2013, including the progress in terms of labor safety and conditions, but the US is not in agreement.”
However, while reinstating GSP is a major factor, readymade garments are not covered under the agreement, and with such a high percentage of the exports being apparel, the need for preferential market access is a big factor for trade negotiations.
“So, meanwhile, the important issue is a request for zero tariff on Bangladesh apparel exports to the U.S. that are made with U.S. imported cotton,” said Rahman. “This stands to reason. However, it is easy for the U.S. to say that the zero tariff on cotton imports is because it keeps the price of the products lower, so it is in the interest for Bangladesh to do this anyway.“
“The other issues of supporting trade unions in export processing zones, and decreasing the minimum signatures required for trade unions are also important points,” he added.
Bigger, perhaps, were the geopolitical issues impacting trade and economics, Rahman said.
“There is an obvious elephant in the room with the elections coming up,” he said. “The U.S is putting pressure on free and fair elections and making visa restrictions on individuals, and all of this must be noted, as trade and everything is connected.”
Apparel manufacturers, hoping for better access to the U.S. markets, want trade negotiations that don’t keep pushing for endless reform without reward.
“We are not against making reforms, but this is an ongoing process,” said Fazlul Hoque, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). “The progress we have made should be noted. As manufacturers, we uphold the right of the workers. The issue of trade unions is being taken up, but this should not be used as an excuse for outside workers to interfere. The history of trade unions in Bangladesh is not a happy story, with political and unnecessary interference from outside a factory under the guise of trade unions. That is a fear factor for entrepreneurs; the ground realities cannot be ignored.”
“The U.S is a powerful country, can we not expect some help? We do not have to be rewarded for everything we do, but perhaps a reward for some of the development that we have achieved?” Hoque said.
Although USTR understand Bangladesh’s point of view, it expects more progress on labor reform. “The United States noted the ongoing review of potential amendments to the Bangladesh Labor Act (BLA) and encouraged Bangladesh to extend freedom of association and collective bargaining to Bangladesh’s Special Economic Zones (SEZs) and the Export Processing Zones (EPZs),” USTR said in a statement after the discussions in Dhaka.
Recognizing that Bangladesh had worked to “address hurdles workers face when registering unions”, USTR officials stressed the importance of ensuring a simplified and impartial trade union registration process that allows for applications to be registered within the legal timeframe.
“Additionally, the United States urged Bangladesh to dedicate more resources to labor inspections and enforcement,” the USTR statement said. The USTR also wants Bangladesh to allow trade unions to more form with fewer roadblocks, with the minimum percentage of workers’ consent needed to form a factory trade union to be brought down from 20 percent.
Discussions will continue at the eighth TICFA session, in Washington, D.C. in 2024.
