What is GSP? The Generalized System of Preferences (GSP) is a form whereby a wide range of industrial and agricultural products originating in certain developing countries is given preferential access to the markets of the European Union and North America. The preferential agreement is given in the form of reduced or zero rates of customs duties. The GSP scheme is specifically designed to benefit certain developing countries like Bangladesh, Sri Lanka, Myanmar, Pakistan, etc. and integrate them into the world economy.
Why the US suspends GSP in Bangladesh
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) in its petition to the United States Trade Representative (USTV) mentioned that trade unions do not exist in most garments in Bangladesh. There are 137 trade unions although total garment factories stand at 5,000. Again, none was arrested for the killing of labor leader Aminul Islam.
It seems obvious that under pressure from American Federation of Labor and Congress of International Organizations (AFL-CIO), the US administration found a loop-hole in the safety and working conditions of workers and the death of thousands of workers following the collapse of Rana Plaza and fire at Tazreen Fashion have highlighted the poor safety record and working conditions of workers all over the world.
The powerful trade union of the US AFL-CIO favors protectionism in trade. Since US products cannot compete with products from outside countries, they want to protect the jobs in US factories for members of the trade unions by restricting the entries of foreign products in the American Market. The AFL-CIO is against the trade policy under WTO. As a result, they ignore the American consumers the best and cheapest foreign goods as they are generally unconcerned where they come from at the time of buy products.
At the hearings at the office of US trade representative concluded in early June, Bangladesh government officials stated that the government was taking all necessary steps including a new labor law to indicates all the issues relating to workers. Given this background, many analysts question whether the poor safety record of workers appears to be the real reason for the suspension of GSP by the US government.
Many analysts argue that there are some strains visible in Bangladesh-US relations, despite the bilateral partnership – talks at the top officials’ levels. For example, during the tenure of four and a half years, Bangladesh Prime Minister could not do a bilateral visit to the US to meet with President, while she was able to pay an official bilateral visit and meet Russian President.
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