Trade Policy

Why Penalizing Bangladesh Isn’t the Answer


Why Penalizing Bangladesh Isn’t the Answer

Photograph by Wong Maye-E/AP Photo

In the wake of the horrific building collapse in Bangladesh earlier this year that killed a thousand people, mostly garment sector workers, the Obama administration decided today to suspend the country’s trade benefits under the Generalized System of Preferences (GSP) program. There’s just one little problem: The 90 percent of Bangladesh’s exports that are clothing don’t receive these benefits, and face an average import duty of 15 percent. The $35 million in Bangladeshi exports that are penalized by this decision are less than 1 percent of the total.

So the move is more symbolic than substantive—which is actually a good thing. While conditions in the clothing sector are abysmal and definitely in need of improvement, cutting off exports would only make things worse. Roughly 4 million poor Bangladeshis, mostly young women, have jobs in the sector, and however bad those jobs are, they’re better than the available alternatives.

If President Obama and new U.S. Trade Representative Michael Froman were serious about improving working conditions in Bangladesh—and about “working to foster development through trade,” as Ambassador Froman said at his swearing in—they would do the opposite of what they are doing. They would offer to increase the paltry trade benefits that Bangladesh receives, contingent on serious and sustainable improvements in worker rights.

The administration could do this by signing on to an initiative to provide duty-free, quota-free market access for the world’s least developed countries (LDCs), including Bangladesh, that all the other industrialized nations long ago embraced. But that would require taking on the U.S. textile industry—and symbolic gestures are far more appealing than messy political fights.

Elliott is a senior fellow at the Center for Globalization and Development and co-author of Can Labor Standards Improve Under Globalization?

Steve Ballmer, Power Forward
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