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In a letter to Congress on Thursday, President Obama said that the United States would withdraw trade privileges to Bangladesh because it was “not taking steps to afford internationally recognized worker rights.”
Labor unions and Democrats on Capitol Hill have been pressing the Obama administration to take this step. Bangladesh is allowed to export nearly 5,000 products duty-free to the United States, which purchases about 25 percent of the country’s $18 billion in annual apparel exports.
Bangladesh is among more than 125 countries that receive such breaks on United States tariffs under the Generalized System of Preferences, a World Trade Organization program that is intended to promote economic growth around the globe.
The loss of GSP status means that many Bangladeshi imports will be subject to higher tariffs once the suspension formally kicks in.
The AFL-CIO first complained about conditions in Bangladesh in 2007, when Bush 43 was still in office. Besides numerous factory fires, the AFL-CIO was concerned about union-busting in the garment industry. That complaint got put on the fast track in the wake of two of the worst accidents in the history of garment manufacturing--the Tazreen factory fire in November and the Rana Plaza factory building collapse two months ago.
The GSP does not apply to the garment industry, which doesn't enjoy duty-free status in the States. However, it could spur the EU to follow suit. Bangladeshi-made garments do enjoy duty-free status in Europe.