Editor-in-Chief's Column
Quamrul Ahsan, Ph.D

editorinchief@cottonbangladesh.com


 

The US GSP Facility and Bangladesh

 

 

Although the General System of Preference (GSP) scheme was introduced to promote exports of low-income countries to the industrialized nations, such as European Union and the US, to support their economic growth and development, time and again these schemes have been proven to be extremely complex and controversial. While in theory, it has been designed to promote economic development, financial, and trade needs of developing and least developed countries, in practice, it has been used as a mechanism for promoting non-trade, social or arguably moral preferences of the benefit granting countries with no direct linkage to the needs of the beneficiary countries.

The United States had instituted the GSP program in 1976 to promote sustainable development in beneficiary countries to increase and diversify their trade with the United States. The program also provides additional benefits to the US economy by supporting consumers and creating tens of thousands of jobs in the US. It also boosts American competitiveness by reducing costs of imported inputs used by US manufacturers. The GSP is especially important to US small businesses, many of which rely on the program's duty savings to become competitive.

The US administration renewed the GSP facility recently for least-developed and developing countries. Surprisingly, Bangladesh was excluded from the list of 122 beneficiary countries. The US suspended the GSP facility to Bangladesh in the wake of Rana Plaza disaster in 2013, citing poor workplace safety and labor rights and gave 16 conditions to fulfill. Bangladesh government claims that it fulfilled all the conditions including occopupational safety and workers rights. The US is unmoved. Many analysts suggest that the US decision is unilateral and politically motivated. A number of countries in the beneficiary list of 122 have questionable records of labor conditions and their rights. The overall Human Development Index (HDI) of Bangladesh is much higher than many South Asian countries in the list including Pakistan, Nepal, Sri Lanka, Bhutan and Afghanistan. Bangladesh is making continuous progress in developing working conditions including safety and labor laws.

While the value of GSP access to the US market in direct economic terms is nominal, because of the limited coverage of eligible goods with export potential, however, it has a significant symbolic value, which prompted the need for regaining the GSP status at shortest possible time. There is no doubt that it is an utter diplomatic failure for Bangladesh to resolve this issue with the US government. The policy makers in Bangladesh Government frequently blame the US for its own failure, however, they didn't offer any explanation for the failure of the so-called intense diplomatic efforts. Bangladesh needs to engage more in diplomatic efforts and invest more time and energy to navigate through the complex political landscape in Washington DC for our own benefit.



 

 

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