Bangladesh GSP: It IS an empty gesture

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:

-          Its impact on Bangladesh exports is trivial.

-          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