Apparel Sourcing Intelligence - Worldwide

EU warns Bangladesh of duty free suspension over labour rights

The European Union was reported on March 23 to have warned Bangladesh of suspending duty-free access unless Bangladesh makes progress in the implementing worker rights.

The European Commission’s Directorates General for Trade and Employment, Social Affairs and Inclusion, together with the European External Action Service sent a joint letter on March 10 to the Bangladesh  ambassador  in Brussels. This 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, which is applied irrespective of where raw materials originate. 62% of all Bangladeshi apparel exports go to the EU, most of which would see a 12% price increase if the concession were withdrawn.

Apparel exports to the EU account for 55% of Bangladesh’s entire exports.

The four requirements made by the ILO in 2016 were:

  • Amendments to Bangladesh’s 2013 Labour Act.
  • Clear rights being given to workers within export processing zones (EPZ) to be allowed to form trade unions and associate with other trade unions outside theEPzs
  • Urgent legal action against anti-union activities and remedies for victims of such actions.
  • Government steps against arbitrary dismissals of trade union registration applications.

Implementing these measures “will be essential for Bangladesh to remain eligible for EBA regime,” says the letter.

Bangladesh’s history of foot-dragging, outright untruths, threats to workers telling the truth about its companies’ contempt for international agreements and changing the subject is almost the most constant feature of the global apparel scene.

Commerce Minister Tofail Ahmed reaction to the threat was characteristic.  “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.

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.”

Implementing laws properly is simply not intjhe nature of Torail Ahmed’s government. But, if he continues to prevaricate and the EU does follow up on this threat, up to two million Bangladeshi workers could almost immediately lose their jobs.

EU officials are playing a difficult game of bluff.