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BD didn’t seek GSP after 2015, says US official

Eyes wider trade ties with Dhaka


FE Report | January 12, 2018 00:00:00


The United States thinks that Bangladesh still needs the generalized system of preferences (GSP) facility to boost its export in the US market and to remain competitive with other countries, as GSP is the only duty-free facility of the US for the developing countries.

But an US Embassy official in Dhaka said there is no petition by the Bangladesh government to reinstate the facility after 2015.

The official, preferring not to be named, told a group of journalists on Thursday that the GSP facility was suspended after the Rana Plaza tragedy in 2013, and allegation is still raised against the US government for not allowing the facility for Bangladesh.

"Bangladesh never requested for GSP facility after 2015, but every year it is reviewed," he said.

However, if a petition is now made (to get the facility), it will have to go through 16 points, which include labour law reform as per the international standards as well as freedom of association and trade unionism in the country's EPZs.

He admitted that the country has made significant progress in improving labour situation, but said it is still far behind from the standards set by International Labour Organisation (ILO).

The number of labour union registration, which increased in 2014 and 2015, has decreased significantly, and it is also against the GSP action plan, he pointed out.

Referring to a question why the US pressures Bangladesh to form unions when the country has no such unionism, the official said the US government's focus is also on creation of environment, so that if workers want they can form unions.

Mechanism should be there, so that if the workers want a union, the law allows such opportunity.

The US-Bangladesh investment relationship is based on garment export, enjoying the largest market in America. But the US Embassy records US$ 80 million less export last year than the previous year.

As the relationship is expected to boost further in 2018, the US Embassy finds huge opportunity for the US investors in Bangladesh. Many US companies show interest in investment here, considering huge potentials in local oil, gas and energy sectors, the official noted.

Sustainable economic growth and growing middle class have also made the country attractive to the US consumer producers. But lack of infrastructure and regulations are among the difficulties that the companies face to invest in Bangladesh.

The US Embassy expects that the country's export basket will be diversified, focusing more on value addition of products.

Diversification of export products may also help Bangladesh enjoy tariff benefit from the US, like China and Vietnam, the official said, when the tariff differences found among these countries in terms of garment export to the US was pointed out.

Diversified products and value added products will also help Bangladesh increase its export to the US market along with meeting the target of graduation as a middle-income country.

Bangladesh's graduation may drop it from availing some categories of GSP facility, as those are for the lower-income countries. But GSP in other categories are the only preferential access for the developing countries to the US market, he added.

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