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Wednesday, June 28, 2017


Warning on EU GSP withdrawal

Govt, RMG makers move to address ILO conditions

Bangla Apparel Desk

April 19, 2017

Both the government and the apparel makers have moved forward to address certain conditions of the International Labour Organization (ILO), related to workers’ rights, in the wake of the recent warning on withdrawal of the European Union’s (EU) GSP facility for Bangladesh.

The European Commission (EC) recently issued the warning on temporary withdrawal of the Generalised System of Preferences (GSP) benefit for the country, if it fails to address the labour rights issues and come up with a proper plan of action in this regard within a certain timeframe.

“We have taken the latest warning seriously, and are trying our level best to address the issues concerned,” Labour Secretary Mikail Shipar told the FE. He further said: “The EU’s GSP is important for us, as the EU is the major destination for Bangladeshi exports.” The government has already advanced one step regarding ensuring the workers’ trade union rights in the country’s Export Processing Zones (EPZs), and full implementation of the labour law in the EPZs may take some more time.

The government is going to discuss the issues relating to possible amendments to the labour law in the ensuing meeting of the National Tripartite Committee, he further said. Besides, the government has also initiated the process of establishing a database to look into the trade union registration activities, especially the complaints made by the workers to this effect.

The government has recently formed a Tripartite Advisory Committee for the garment sector to address the labour-related issues, Mr Shipar added.   

On the other hand, the apparel makers have already discussed the issues among themselves and decided to do everything possible to avert any untoward move from the EU. “We are also serious about the EU’s concern, and going to put forward our opinions and suggestions to the government shortly,” said Mahmud Hasan Khan, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The industry insiders, however, said since the concerns expressed by the ILO and the EU are very much related to the factories operating in the EPZs, the apparel units outside the EPZs do not have much to do in this regard. According to them, exports from the factories of the EPZs account for only 8.0 per cent of the total exports, so the industry does not want that the country’s total exports get affected by the EPZ-related labour issues.

“We will lose our competitiveness, if the EU withdraws its GSP for Bangladesh. Duty at the rate of 12.50 per cent has to be paid by the importers,” a fish exporter said. Nearly 80 to 85 per cent of the country’s total frozen fish and shrimp exports go to the EU, he added.

Meanwhile, experts suggested that both the exporters and the government should take prudent steps for safeguarding the EU GSP facility. According to them, suspension of the trade facility by the EU might create an adverse impact on the country’s overall trade and economy, especially on bank and insurance sectors.

“Bangladeshi relevant authorities should take immediate steps to address the concerns and let the EU know about the country’s time-bound plan of actions in this regard,” said Mustafizur Rahman, distinguished fellow of the private think-tank Centre for Policy Dialogue (CPD), while talking to the FE.

Bangladesh is the EU’s 33rd largest trade partner in goods, and the country’s exports to the EU are dominated by clothing and textile. Bangladesh fetched $17.15 billion, 61 per cent of its total garment exports, from exporting garment items to the EU in the fiscal year 2015-16. The EC’s latest warning has come following suspension of Bangladesh’s GSP benefit by the US government in June 2013.

After the US GSP suspension, the EU earlier reminded Bangladesh of taking necessary measures for ensuring workplace safety and labour rights in order to retain its GSP benefit in the EU markets.

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