US-GSP controversies and branding problem

FE Team | Published: January 24, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

Akramul Qader concluding his two-part article, Bangladesh in the US-GSP: An emerging nation's fluctuating trade fortunes Since 1997, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) has been conducting fire safety training and fire drill at factories on a regular basis. Nineteen top-notch global clothing brands, including GAP Inc., H&M, JCPenny assisted BGMEA in their efforts. Two films on "what to do if fire occurs" have been made and screened at a regular intervals. Healthcare initiatives: Aside from 12 healthcare centers run in Dhaka and Chittagong, the BGMEA has been constructing two full-fledged hospitals-one 150-bed in Dhaka and another 100-bed in Chittagong, only for the garments workers and their families. It is expected that both the hospitals would be fully operational by February 2013. BGMEA has also implemented a mandatory group insurance for workers and executives. The industry with support from the government has been implementing a 24-month stipend programme for lactating mothers with children below 2 years of age. Nutrition and lodging: The government in partnership with the BGMEA plans to make suitable housing facilities for the garments workers. An agreement was signed last June to that effect. The government plans to have housing facility for all workers in phases. It is expected that 3000 workers would have the government-BGMEA sponsored home within a year. Skill enhancement: The BGMEA University of Fashion & Technology (BUFT) was launched in March 2012 to train up human resources in the RMG, textile and allied sectors of Bangladesh. The BUFT's academic courses began in September 2012. It is expected that this institution would be able to fulfil the need of skilled manpower for 5000 garments factories in the near future. BUFT envisages that one day some of the nation's best performing garments workers would be on its faculty. Recreation: "Workers festival" is celebrated every year to forge a deep workers-owners bondage. Around 50,000 workers take part in the nationwide musical contest "gorbo" [pride] which is telecast in a popular private TV channel. Every year the winner receives Tk 100,000 prize money from the Prime Minister. Retaining GSP: An undeniable humane cause: Bangladesh cares very deeply about retaining Generalised System of Preferences (GSP) benefit because of the following reasons: a) Bangladesh's extremely narrow and fragile export basket, b) link between trade performance and human development and social stability, and most importantly, c) seeking recognition as an early stage industrializing nation. Bangladesh's export sector is extremely narrow and fragile in terms of both size of market and diversity of export items. The USA is Bangladesh's single largest export destination that accounts for over a quarter of Bangladesh's total exports. Over 95 per cent of the export earnings from the USA [worth over $4.5 billion] come from just one single export item i.e. RMG. Given that excessive dependence on one single particular item Bangladesh remains extremely serious about adding new items in its export basket. Here lies the significance of the US-GSP. Bangladesh is still at its early stage of industrialisation. Over the last few decades it has made consistent efforts to address the key infrastructural bottlenecks that have been inhibiting economic growth. Its history as a trading nation is shorter than even a good number of least developed nations. Most of the developed countries have withdrawn tariff barriers for imports from the least developed countries including Bangladesh. The USA is perhaps the last remaining exception. While uninterrupted access to US-GSP, as long as it retains its current format, would not do Bangladesh's major export earner (the readymade garments or RMG) any favour, it carries a valuable message of recognition, a recognition that a poor nation's efforts, however modest, do not go unnoticed. Bangladesh, on its part, can direct all reforms only on the supply side. Without a suitable response from the demand side, as is expected from the unassailably biggest buyer such as the USA, only very limited result can be expected. Bangladesh firmly believes that the US Congress and senior officials would have a look at the interface between the low income democratic nation's trade sector goals and overarching human development goals such as nutrition, mass education, employment, women empowerment, social harmony and what not. US-GSP does not directly benefit Bangladesh's garments sector; however its withdrawal would create a serious branding problem for Bangladesh. The worst victims of any market dislocation would be the 4.0 million ultra-poor workers over 90 per cent of whom are women. Closure of Bangladesh's garments factories resulting from any harsh trade measures can take the millions of women only to the streets. No ethical individual or labour activist can imagine such a social catastrophe. Alternatively, with a proper understanding of the existing complexities, if Bangladesh's market access case is dealt more practically and compassionately, millions of our daughters and sisters would certainly have their right to a decent and dignified life. Policy makers of this land of freedom and opportunities who have paid a historic part to the cause of humanity need to speak for our factories more as a "labour cause" rather than a "profit drive". Bangladesh's labour-intensive factories exemplify a true case of how deeply trade policy agenda could be linked to global poverty reduction agenda. This is an updated and revised version of an earlier write-up by Akramul Qader, Ambassador of Bangladesh to the USA that appeared on January 17, 2013 in a national English daily