The European Union has warned Bangladesh of suspending trade preferences unless the country makes progress in the implementation of worker rights.
Three European Commission bodies in a joint communique on March 18 said it was essential that Bangladesh implemented the four recommendations made by an International Labour Organisation committee last year, or risk being shut out from the Generalised Scheme of Preferences that it enjoyed.
Without progress on this issue, the commission could launch a formal investigation, which could result in temporary withdrawal of preferences, the letter said.
Currently, Bangladesh enjoys duty-free market access to the EU countries for all products under the Everything But Arms (EBA) preferential tariff scheme. A suspension of this facility could lead up to 12% tariff on imports from Bangladesh. The major part of the import is clothing, which is currently exempted from a 12% tariff, while shrimp is exempted from a tariff of 10%.
The three bodies who sent the letter were the European Commission Directorate General for Trade, the European Commission Employment, Social Affairs and Inclusion, and the European External Action Service.
It was sent to Mohammad Shahdat Hossain, the ambassador of Bangladesh in Brussels.
Asked about his reaction to this, Bangladesh Garment Manufacturers and Exporters Association President Siddiqur Rahman told the Dhaka Tribune: “I do not believe that the EU will stop providing existing trade facilities as Bangladesh has made a lot of progress in ensuring worker rights as well as safety.”
However, if it does take the decision, it would definitely hurt Bangladesh as over 61% of garment export earnings come from EU markets, he said.
“We have ensured workers’ rights as per the labour law,” Siddiqur said.
According to the Export Promotion Bureau (EPB), Bangladesh export to EU countries stood at $18.68 billion in the last fiscal year, which is 54.57% of total export of $34.24 billion. Of the total amount, $17.15 billion came from apparel products.
The suspension may end up costing the European buyers more than $2 billion (over Tk16,000 crore) resulting in European companies choosing manufacturers in other countries.
The European Union currently accounts for just over 62% of all Bangladesh’s garment exports.
“We will need to demonstrate to the European Parliament, council of Ministers and to civil society that Bangladesh is taking concrete and lasting measures to ensure the respect of labour rights,” the letter said.
Zillul Hye Razi, former European Union trade adviser, told the Dhaka Tribune: “This is not to be taken lightly. Considering the agencies that sent it, the letter is quite serious and means business.
“If we want to evade this risk, we need to properly follow and implement the existing labour laws and regulations.”
The recommendations that the letter cites, made originally by the ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) last year, focus mainly on workers’ right to association and collective bargaining.
The first recommendation asks for amendments to the 2013 Labour Act. The second calls for workers within export processing zones (EPZ) to be allowed to form trade unions and associate with other trade unions outside.
The third calls for urgent legal action against anti-union activities and remedies for victims of such actions. The fourth asks that the government does not dismiss trade union applications arbitrarily.
Implementing these measures “will be essential for Bangladesh to remain eligible for EBA regime,” says the letter.
Amirul Haque Amin, president of IndustriALL Bangladesh Council, the local chapter of the global workers’ union, told the Dhaka Tribune on Thursday: “We met today with the BGMEA about the recent Ashulia unrest and there is a consensus as per the agreement among us and the government to resolve all issues.
“Some of the dismissed workers have already been reinstated while others are being processed.”
Commerce Minister Tofail Ahmed said: “There are no difficulties and barriers in practising unionism in Bangladesh. We have ensured labour rights as an ILO ratifying country.”
Workplace safety has been ensured and the RMG sector is going through a remediation process, he said.
“There is a follow up meeting of the Sustainability Compact in April with an EU delegation. There, Bangladesh will present the progresses made in the last four years in the field of worker rights and workplace safety,” the minister said.
“The EPZ workers also enjoy freedom of association under workers welfare associations,” he added.