America’s decision to suspend Bangladesh’s Generalised
System of Preference GSP concessions was supposed to be coming “with some kind
of roadmap to enable the restoration of suspended trade privileges if it makes
progress on labour issues," according the anonymous official who first
leaked the story.
In fact it just came with a bland sentence that “the
Administration is also initiating new discussions with the government of
Bangladesh regarding steps to improve the worker rights environment in
Bangladesh so that GSP benefits can be restored… The Obama Administration is
committed to reflecting American values in our trade policy, including with
regard to the rights of workers worldwide” There followed a list of what the
Obama Administration has done with countries with seriously awful worker rights
and a US free trade deal.
Which, in the case of Bahrain, Guatemala and Colombia is
nothing – but with enough court hearings and public investigations discussing
just how “nothing” nothing means to keep a fair proportion of America’s lawyers
in gainful employment for several years. And in the case of other US free trade
partners, nothing at all.
Bangladesh is being penalised (as Madagascar was a few years
ago) because it doesn’t hurt the US. Bahrain, Guatemala and Colombia – all countries
where unions are aggressively, and often lethally, persecuted – all have strategic
roles that matter to US policy makers. Bangladesh – where strikes break out
daily – is having sanctions imposed on it as Burma – which has aggressively
kept unions out for decades – is having its sanctions lifted because America
believes its companies can sell a lot of services to the Burmese.
It’s important to understand what the US decision means, and
doesn’t mean:
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Its impact on Bangladesh exports is trivial.
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It means nothing for any plans by American
businesses to invest in Bangladesh, because practically no foreigner invests in
Bangladesh. And, as Youngone’s
current travails indicate, Bangladesh doesn’t really want them to anyway: the
Bangladesh Garment Manufacturers’ and Exporters’ Association has repeatedly made it
clear that it opposes foreigners investing. Bangladesh does want investment in
its roads, trains, ports and energy – but they’re not things American companies
particularly want to invest in
-
It means nothing, by itself, for US businesses
buying from Bangladesh. If seeing hundreds of garment workers die there hasn’t alienated
significant numbers of US shoppers, it’s hard to see how a minor import duty
adjustment on things Bangladesh doesn’t export will influence US garment retailers and brands
-
It means almost nothing for Europe. In the US, a
country’s GSP status may be altered by Presidential mandate, which takes weeks.
In Europe, changing a Least Developed Country’s duty free status is a
complicated affair, requiring public debate in the European Parliament and
endorsement by the community’s 28 (as of July 1, 2013) members. Not just likely
to take a couple of years, but quite possible to get hijacked en route by the
many interest groups who believe Bangladesh’s duty free status should not be
changed.
The best possible outcome of all this is that it encourages
the EU to start the process of looking at withdrawing Bangladesh’s privileges.
There’s a real debate in Bangladesh about what kind of rights unions should
have, though in the West there’s far too little heard from those pushing for
controls on what unions can do.
That debate can easily be used as an excuse to stop unions
altogether – and one way of ensuring the Bangladesh government won’t drag its
feet in its promise to legalise unions is by holding those feet to the fire of
a real threat its European duty free access will disappear if there aren’t
proper unions quickly.
Otherwise: this suspension is going to be little more than a
device for improving the Administration’s relationships with its union contributors
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