The April 2013 collapse of the Rana Plaza building in Dhaka brought the plight of Bangladesh’s garment factory workers into the international spotlight. In the fallout, the United States suspended Bangladesh from its Generalized System of Preferences (GSP) program, thus reinstating several tariffs on Bangladeshi exports.
The logic and fairness of this decision have been questioned. Over 90% of Bangladesh’s exports to the U.S. constitute readymade garments, while almost all textiles and garments are excluded from duty-free treatment under the GSP program. As a result, the suspension has had essentially no effect on the Bangladeshi garment export to the U.S.; it instead punishes the other exporting industries.
In January 2015, a review by the United States Trade Representative concluded that the suspension should be left in place, despite over 2,000 inspections of Bangladeshi factories and the closing or partial closing of almost 50 of them – an impressive feat for a country beset by corruption and political hurdles.
Being almost fully comprised of garments, the Bangladeshi export is fragile and in need of diversification. This makes it especially perplexing that while the stated purpose of the suspension is to improve garment workers’ safety and rights, the result has no bearing on the garment industry and is instead potentially hampering the growth of other industries.
At the same time, it’s debatable whether punishing the garment industry would actually advance these aims. The workers themselves rely on their jobs for survival, often being the only employed individual in the household. From interviews, it’s clear that they would not be served well by losing their work.
A more productive approach than restrictive trade measures might be to proactively assist the country in reaching these goals. Profit margins in the industry are small: removing textile and apparel tariffs, rather than instating them, would give exporters some room to focus on safety and workers’ wages.