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Professor Rehman Sobhan on GSP

Published in The Daily Observer on Wednesday, 19 August 2015.

GSP Suspension
Seven sectors see setback

Mizanur Rahman

Seven sectors are facing setback, as GSP suspension has not yet been lifted, especially in the US market, according to businesspeople.

These sectors are leather, sports equipment, tobacco, utensils, ceramics, shrimp and plastic materials.

Jashim Uddin, President of Bangladesh Plastic Goods Manufacturers and Exporters Association, said the plastic industry has mainly been affected because of the fresh US decision that does not restore the benefit of Generalised System of Preferences for Bangladesh.

“Plastic exports will fall apart against international competition if the industry has to pay more taxes,” he said.

Barack Obama administration has suspended long-time US preferential trade benefits for Bangladesh on the backdrop of worst-ever tragedy in Bangladesh’s garment sector following Rana Plaza and Tazin Fashion tragedies in 2013.

Bangladesh’s apparel came under scrutiny after the collapse of the Rana Plaza at Savar that killed over 1,100 people and the devastating fire at Tazreen Fashions Ltd  that claimed the lives of more than 110 workers.

It could also influence the European Union (EU) buyers to take similar action, which would have a much bigger impact on Bangladesh and its garment sector. The EU buys more than $12 billion in Bangladeshi garments each year or roughly three-fifths of the country’s production. However, the country was saved as the EU did not take any such drastic measures against Bangladesh.

Export Promotion Bureau officials said leather and leather goods, sports equipment, tobacco, utensils ceramics, shrimp and plastic materials worth US$ 3,40,0000  were exported  to the US market  under GSP in 2012, in which tariff concessions valued $20,00,000 were received.

The growth in exports has been attributed to political stability and rise in consumers’ and buyers’ confidence amid the initiatives taken to improve compliance standards in the apparel sector after the Rana Plaza disaster.

The US government suspended the GSP facility for Bangladesh in June, 2013 after the Rana Plaza collapse.

On July 19, 2103, the United States Trade Representatives (USTR) prescribed a 16-point action plan to the government of Bangladesh saying: “On the basis of this action plan, the US looks forward to continuing work with Bangladesh on the actions it needs to take in relation to potential reinstatement of GSP benefits.”

“US retailers rely on Bangladeshi garment makers for two reasons-long-standing relationship and commitment,” said Exporters Association of Bangladesh (EPB) President Salam Murshedy.

“Bangladesh’s RMG exporters always keep their words while doing business and never miss the shipment deadline,” Murshedy said, adding that even during the political unrest, they continued to deliver products in time.

Murshedy said, “Though we are disappointed for not getting back GSP, Bangladesh should continue lobbying to reinstate the trade facilities. After the Rana Plaza disaster, the GSP was suspended, he said, pointing out  that many congressmen expressed satisfaction over  Bangladesh’s progress over fulfillment of  16 conditions imposed by the USTR.”

Professor Rehman Sobhan, Chairman of the Centre for Policy Dialogue (CPD), however, differed with the US decision to leave Bangladesh out of GSP, while over 120 other countries enjoy the facilities.

The eminent economist said compared to many other countries on the GSP list, Bangladesh is far ahead in terms of compliance, if a proper assessment is done. “Many countries are not ahead of Bangladesh (in terms of qualifying for GSP),”he added.


Published in The Independent

Revival of GSP facilities
Labour rules to be ‘finalised soon’

Staff Reporter

All relevant labour rules will be finalised within a couple of weeks to fulfil all 16 conditions imposed by the US government for restoration of the Generalized System of Preferences (GSP) facilities in the US market, commerce minister Tofail Ahmed has announced. “All the conditions will be fulfilled through finalisation of the labour rules,” he told reporters after meeting the ambassador and the high commissioner of the US and Canada respectively at his office in the Secretariat yesterday.

US Ambassador to Bangladesh, Marcia Stephens Bloom Bernicat, the head of the Department for International Development (DFID) in Dhaka, Sarah Cooke, Danish Ambassador Hanne Fugi Eskjer, and Canadian High Commissioner Benoît-Pierre Laramée met the minister.

Besides, senior secretary for commerce Hedayet Ullah Al Mamun, labour secretary Mikail Shipar, and foreign secretary Shahidul Haque were present at the meeting. The commerce minister said the discussion with the ambassadors and high commissioners had been very fruitful, and they had assured him that they would work with the government.

Regarding the conditions imposed by the United States Trade Representative (USTR), Tofail Ahmed said they had completed all action plans, except labour rules. It will be completed within one or two weeks, he added.  Responding to a question regarding the political issue of GSP, the commerce minister said most Bangladeshis—even noted economist Rehman Sobhan—also think so.

Appreciating the improvement in safety in factories, Bernicat said progress in this regard was rapid. She also expressed hope to work jointly with the government for further improvement in the readymade garments (RMG) sector.  Replying to a question on the GSP facilities, the US Ambassador said she would inform her government about the proposed 16-point action plan.

However, she said Bangladesh does not get GSP facilities for its RMG sector. “Only in the non- RMG sector does Bangladesh enjoy such facilities,” she said. “I have sent a report about the progress in the 16-point action plan and a team from the United States Trade Representative (USTR) will visit Bangladesh to witness the progress,” she added.

A USTR-led interagency review has concluded that while Bangladesh has made progress over the last year to address fire and building safety issues in the RMG sector, further progress is required, including the need to address serious workers’ rights issues, before reinstatement of Bangladesh’s trade benefits under the Generalized System of Preferences (GSP) can be considered.


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