Following a grim warning from the European Union (EU) of pulling Bangladesh out its trade benefits under Generalised System of Preferences (GSP), the government formed a working committee this week to help address the issues raised by the Sustainability Compact and the International Labour Organisation (ILO).
The committee will reportedly assess the progress so far made and fine-tune the remaining issues. It will also coordinate among the authorities to prepare the paper to be presented in the next Sustainability Compact and the ILO conference to be held on May 18 and mid-June next respectively.
A delegation of Members of European Parliaments (MEPs), in its recent visit to Bangladesh last month, pressed for the full implementation of Sustainability Compact and addressing the ILO concerns before the next meeting to sustain the duty-free facilities under the EU's EBA (Everything But Arms) regime.
The EU countries reportedly receive regularly reports of harassment, intimidation and repression of trade unions, as well as restrictions on trade union activities.
There is no denying that an atmosphere of tension is prevailing in the country's apparel sector following the EU warning of temporary withdrawal of GSP benefit if Bangladesh fails to address labour rights issues and comes up with a proper plan of action within a certain timeframe.
The EC warning letter said if the progress is not enough, its monitoring could eventually lead to the launching of a formal investigation which could result in temporary withdrawal of preferences. In the letter, the EC mentioned that it would be essential for Bangladesh to remain eligible for the EBA regime and they need to demonstrate that Bangladesh was taking concrete and lasting measures to ensure the respect of labour rights.
It may be mentioned here that Bangladesh-made products, including apparel, enjoy duty-free facility under the EU GSP. More than 60 per cent of the country's total exports are destined to markets of the member-states of the EU. The country is by far the largest EBA exporter to the EU, accounting for 65.7 per cent of EBA exports with a value of over 14.6 billion euro.
The country's apparel makers have recently moved forward to address certain conditions of the ILO, related to workers' rights, in the wake of the recent EU warning. They have already discussed the issues among themselves and decided to do everything possible to avert any untoward move from the EU.
On the other hand, the government has taken steps to ensure the workers' trade union rights in the country's EPZs. However, it is assumed that full implementation of the labour law in the EPZs may take some more time. Besides, the government has also initiated the process of establishing a database to look into the trade union registration activities, especially the complaints made by the workers to this effect.
The industry insiders, however, said since the concerns expressed by the ILO and the EU are very much related to the factories operating in the EPZs, the apparel units outside the EPZs do not have much to do in this regard.
According to them, exports from the factories of the EPZs account for only 8.0 per cent of the total exports, so the industry does not want that the country's total exports get affected by the EPZ-related labour issues.
Analysts suggest that both the exporters and the government should take prudent steps for safeguarding the EU GSP facility. Suspension of the trade facility by the EU, they fear, might create an adverse impact on the country's overall trade and economy, including bank and insurance sectors.