Bangladeshs exclusion from GSP
Decision not political, says US ambassador
CPD chair accuses US of depriving country
Exclusion of Bangladesh from the generalised system of preference (GSP) is not because of any political reason.
The US Ambassador to Dhaka, Marcia Stephens Bloom Bernicat, made the comment at a briefing after visiting two RMG factories in Gazipur yesterday.
She came up with the observation in response to a comment of commerce minister Tofail Ahmed, who described on Tuesday the non-restoration of the GSP facility by the US as unfortunate and mentioned that it is only politics, not other reasons, behind depriving Bangladesh.
The ambassador said: Bangladesh was suspended for the GSP by the US in June 2013 after the Tazreen Fashions fire and Rana Plaza building collapse due to serious lacking regarding labour rights and workplace safety. There was no political reason behind the decision, as the decision was taken because of the recommendation of the United States Trade Representative (USTR).
In addition, Bernicat said the progress of the RMG sector for the last two years has been remarkable, but not yet enough to get back the GSP. She said the US government will help Bangladesh continuously to improve the compliance issue and to execute the action plan. Bernicat hoped that Bangladesh would get back the GSP soon if the progress continued.
BGMEA president Atiqul Islam, who also accompanied the US ambassador during the visit, said: We want to send a
message to the buyers of the world that Rana Plaza is not the picture of Bangladesh, as a number of international standard factories are also there in the country.
Elimination of the GSP for Bangladesh is frustrating and unexpected, but it will not affect the apparel industry in the future, he added.
Earlier, a number of foreign delegates, including Benoit Pierre Laramee, High Commissioner of Canada, Pierre Mayaudon, Ambassador and head of the delegation of the European Union to Bangladesh, Ambassador of Spain Eduardo de Laiglesia Ydel Rosal, Dr Lucinda Bell, charge daffaires of the Australian High Commission, Martine van Hoogstraten, charge daffaires of the French High Commission, Dr Thomas Prinz, charge daffaires of the German High Commission, visited Utah Fashion Ltd and Epyllion Knitwears Ltd at Rajendrapur upazila of Gazipur.
Meanwhile, Centre for Policy Dialogue (CPD) chairman Prof Rehman Sobhan criticised the US government for keeping Bangladesh out of its generalised system of preference (GSP), and said the US deprived Bangladesh of the facility without any comparative assessment.
The compliance of the Bangladeshi industrial sector is much better as compared to a number of countries that have been provided GSP, he said while speaking to reporters after chairing a dialogue on Bangladesh apparels sector: Does margin matter for ensuring compliance organised by CPD at BRAC centre at Mokhali in the city.
Mikail Shipar, secretary to the Ministry of Labour and Employment, Anisur Rahman Sinha, chairman of the Opex Group former president of the BGMEA, Rubana Huq, managing director of the Mohammadi Group, also spoke at the programme.
Dr Khondaker Golam Moazzem, additional research director of CPD, made the keynote presentation.
The USA has renewed trade preferences for 122 nations, but Bangladesh has been excluded from the list.
With a view to regulating the buyers, brands and retailers in a better manner, it was necessary to ensure as well as strengthen compliance with international rules, norms and guidelines, the CPD noted.
It also suggested that all kinds of market agents from buying countries that were engaged in sourcing of apparels needed to be registered under the proper authorities. They must also follow international guidelines and should be monitored properly.
Suppliers should take necessary measures to generate additional resources in order to spend on compliance by further reducing cost by improving productivity and efficiency.
CPD also recommended that the government should allocate more resources for enhancing the capacity of respective organisations as well as take initiatives to strengthen their governance practices.
It also suggested that different players, including occupational health and safety committees, national and international NGOs working on social issues needed to be integrated in the auditing process.
CPD found that suppliers usually receive cutting and marketing (CM) charges. About 3 to 10 per cent of total CM is received by the suppliers.
Bangladesh spends the lowest amount for various kinds of costs which are not directly related to production including those of compliance.
Bangladeshi firms have struggled to invest more for compliancerise of compliance-related expenses may reduce competitiveness, leading to additional costs by cutting suppliers profit margins.
Bangladeshs average fabric cost was USS0.18 higher than that of China and USS0.5 higher than that of Vietnam.
A reduction of cost for fabric at par with other competing countries would provide more resources to Bangladeshi firms which could be used for improving compliance.
Under a competitive backward linkage market, it is not so easy to reduce these costs without undertaking medium to long-term investment for improvement of efficiency and productivity.
