Would suspending Bangladesh’s US duty concessions be yet another pointless gesture?

The US will announce that it will suspend Bangladesh’s minimal import duty concessions, news agencies reported on June 27.

Quoting highly-placed US congressional sources the agencies said the Democrats have been pushing for the step since last year, ostensibly because of restrictions on union membership, though the unions pushing hardest for it have also consistently pushed for more barriers against imports from poor countries.

Bangladesh has been promising to legalise free unions for several years, but consistently fails. Amendments to its current legislation, thought to be likely to clear the country’s parliament by the end of June, have been widely criticised as both failing to permit free unions and to reduce workers’ rights in a number of ways.

In practice, of course, US thinking has been swayed by the fire at Tazreen in November and the deaths of 1200 people when Rana Plaza collapsed, and in particular  by the complete failure of the country’s government, factory owners and public officials to honour any legislation or provide any straightforward explanation of anything. It is also no coincidence that the Senators who wrote to President Obama on June 26 calling for the suspension are all heavily dependent on union contributions to their campaign funds.

Under its Generalised System of Preferences (GSP) concessions from the US, Bangladesh can export nearly 5,000 products duty-free to the US, but such products account for less than 1% of its exports, which are dominated by garment exports to Europe. The US promised in 2005 to offer the same duty-free concessions on clothing to the world’s 49 poorest countries that the EU, Canada, Japan, Australia, EFTA and even China do. But that promise has turned out as reliable as a Bangladeshi politician.

A congressional official aware of the administration’s thinking briefed news agencies that Bangladesh has not been permanently dropped from GSP, but has been suspended from the list of the countries entitled to enjoy it.

“Bangladesh won’t be expelled from the programme, and its suspension will come with some kind of roadmap to enable the restoration of suspended trade privileges if it makes progress on labour issues” said the official who spoke on condition of anonymity because he was not allowed to make any formal comment over the issue.

The decision, if confirmed, is clearly trivial in itself. The common argument that it will make the EU more likely to withdraw its duty-free concession is, in our view, absurd. If the death of 1400 in six months as a result of factory owners’ contempt for their workers’ safety will not force the EU to withdraw its concession (and there are valid arguments that the EU should not withdraw duty-free access), it is hard to see how a trivial gesture, aimed more at ingratiating the US Administration with American unions than saving any Bangladeshi lives, will carry any influence with EU legislators.

The triviality of the GSP concession makes it unlikely Bangladesh’s politicians will follow any realistic roadmap the US Administration might dangle. Bangladesh is currently riven with political violence, and many prominent Bangladeshis believe they are the result of deliberate attempts to destabilise the country. Union activities are limited because many sensible Bangladeshis honestly believe many self-styled union activists are motivated more by the desire to create mayhem than to improve the lot of Bangladeshi works.

Saying this does not make their views accurate: but no sensible Bangladeshi is going to risk more violence for easier access to the US market for goods the country doesn’t make.

If the US offered duty-free access for garments, some Bangladeshis might have a different view: but America’s promised that before, and reneged. Its track record on renewing the AGOA duty-free privileges for Africa is disgraceful – and the years and years its legislators have taken to approve free trade agreements with Korea and Colombia give no grounds for expecting any offer by the US to be honoured in anyone’s political lifetime.

On the other hand, the suspension does little harm either. And it just might make Bangladesh’s politicians take the EU’s threats to suspend duty-freeaccess more seriously.

Or it might not.

America has had just one war for independence. In the past 70 years, many Bangladeshis believe they have had at least four. Their territory was on the front line in the fight by British India to prevent Japanese invasion between 1941 and 1945. The struggle against British rule was as supported in what was then East Bengal as anywhere else in India – and most Bangladeshis are descended from people who then had to fight Indians for Pakistan’s independence. Thirty years later, the people of West Bengal had to fight Pakistan for their own freedom – and many in the country believe they’ve been in a constant struggle to stay free of India since.

Few in Bangladesh, after taking on most of the world’s great powers in the last three quarters of a century, are going to take favourably to threats from the US or EU.

My own suspicion is that Obama, ultimately, is just siding with American unions again. And he’ll provoke Bangladesh into believing foreigners can’t be trusted.

This decision, if confirmed, will turn out to be counter-productive. But let’s hope I’m wrong