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Outlining the US GSP suspension

Asjadul Kibria | Friday, 20 March 2015


The United States of America (USA) has suspended the Generalised System of Preferences (GSP), a trade preference for several goods from Bangladesh, one and half years back. The immediate reason behind suspending the GSP privilege for the South Asian country was poor working condition in the country's ready-made garments (RMG) factories. The Rana Plaza disaster, killing more than 1,000 labourers, in April 2013, eventually drove the Obama administration to opt for suspending the trade facility.
Since then, it has taken the proportions of a nagging crisis for Bangladesh in terms of trade, and also politics. The bilateral relations between Bangladesh and the USA became a little 'strained'. Although the Bangladesh government has positively responded to the US-offered 15-point action plan to improve work environment and factory condition as well as for stressing workers' welfare, more things need to be done.
But suspending the GSP and the present dawdling in reviving it is not a perfunctory measure taken by the US government. It appears to be a 'calculated step'. This is what Ranjan Sen has tried to identify in his book titled   "Markin GSP: Orthoniti Na Rajniti" (US GSP: Economy or Politics). He has compiled some relevant documents and correspondences on the GSP suspension and drawn a brief outline of the issue. The writer takes the initiative after visiting the USA in 2013 as a journalist.   
An interesting part of the book is the fact that the author was present in the viewers' gallery at a session of the House of Representatives on June 27. US President Barack Obama officially declared the GSP suspension on that day.
The suspension, however, came into effect in September 2013. The writer of the book also describes the mood of the US officials as he had a chance to visit the US Senate Foreign Relations Committee. In fact, after having an interaction with the officials concerned at the Foreign Relations Committee, Mr Sen clearly got the message that the suspension of the GSP facility was going to happen any time. He immediately conveyed the message to his colleagues in Dhaka before June 27, 2013.
The author had good opportunities to meet a few important members of the US legislative bodies. Of them, his meeting with Congress member Grace Meng was an important one. After the Rana Plaza disaster, she wrote letters to the chief executive officers of the American Apparel Footwear Association --- Walmart and the GAP, saying, "It is time for the U.S. companies to finally take responsibility for the widespread safety problems that have long plagued the factories they use in Bangladesh….It is the moral responsibility of American companies that procure goods within the country to ensure their suppliers operate safe factories." (P-56).
The writer also briefly describes his personal visits in Washington and New York and introduces to readers some Bangladeshis noted for their good works in the USA.  His short family visit to Canada from the USA is also included.
As Mr Sen says in the preface of the book, it is not an analysis of the GSP crisis but a kind of documentation focusing on different stakeholders in an 'unorganised' manner along with a lot of photos. Thus, the book seems to be lacking the in-depth study required for such a crucial topic.
For example, relevant data and statistics on the trend of Bangladesh-US trade and on Bangladeshi exports under GSP are not there. It should be noted that around one per cent of the total exports of Bangladesh were actually enjoying the GSP benefit. The export earnings of GSP-benefited products declined to $21.5 million in 2013 which was $34.6 million in 2012. The amount was USD 27 million in 2011.
Major products under GSP were plastic, ceramics, golf sport-items and carpets. On the other hand, Bangladesh's total export, including RMG products, to USA was $5.303 billion in 2013 which was $4.878 billion in 2012. Thus the total export to the USA increased by 8.7 per cent in 2013, indicating little negative impact of the GSP suspension. Moreover, the restoration of the GSP privilege very much depends on the revival of global GSP, which has been in suspension since September 2013. The discussion also fails to capture Bangladesh's longstanding demand for tariff-free market access. The US has continuously been collecting higher tariffs, on average 15.6 per cent, on Bangladeshi products.   
Nevertheless, in his capacity as a sports journalist, Ranjan Sen's effort to document a critical period born of an important trade issue, which is of immense importance to Bangladesh, is welcome.

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Markin GSP: Orthoniti
Na Rajniti
(US GSP: Economy or Politics)
By Ranjan Sen;
Pages: 128 Price: Tk 500
Published by Oitijjhya, Dhaka