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US companies oppose denial of our privilege |
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August 29, 2000
Dhaka (UNB)- Leading American companies strongly opposed scrapping or modification of trading privileges for Bangladesh under the US Generalized System of Preferences programme, saying any such action will harm their investment in the country in a cascading impact. In a presentation to their government the business community apprehended that denying Bangladesh exports privileged access to US market would weaken Bangladesh’s economy resulting in fading out of direct US investment in the country. “The ramifications of even the threat of the loss of GSP treatment for Bangladesh goods pose a serious threat to the economic viability of the country,” says the US Bangladesh Business Council (US-BBC), an affiliate organisation of US Chamber of Commerce, in a strongly worded letter to US Trade Representative. The Council also described Bangladesh’s trade-union situation chaotic and felt that a better understanding of the situation is needed before justifying a US sanction. The US-BBC concern came amid fears of US sanctions on Bangladesh exports on labour-standard plea in absence of unions in EPZs. Loss of GSP treatment for Bangladesh goods will erode the country’s competitiveness. The Council favoured a public hearing on the issue to more specifically explain the situation before the Trade Policy Staff Committee. It said TPSC is required to hold public hearings on petitions as part of the annual review process of GSP. “Should there be a removal or modification of privileges for Bangladesh under the GSP, US direct investment in that country would eventually evaporate,” reads the recent letter addressed to Jon Rosenbaum, Chairman of GSP Subcommittee of USTR. US investment proposals would be worth over 4 billion dollars. The revocation or modification of GSP status of an LDC like Bangladesh is an extremely serious step as the country’s economy is desperately dependent on export earnings. “Only in the most extreme circumstances should such a draconian measure be taken. This is not such a case,” it said. Bangladesh’s prior record in addressing internationally recognised worker rights justifies continuation of GSP privileges, it argued, citing the country’s success in eliminating child labour from garment sector. As pressures from US government, whipped by strong labour lobbyists there, has mounted on Bangladesh for allowing trade unions in export processing zones, Bangladesh government early this month made a submission to the USTR office explaining its position. The Council also believes that giving exclusive focus upon freedom of association and collective bargaining in the EPZs, without considering Bangladesh’s progress in safeguarding worker rights in other areas, is “unfair and counterproductive.” The US-BBC is the leading private-sector association of US companies with business and investment interests in Bangladesh. The Council is represented by 32 corporations having firms within the energy, infrastructure, financial services, insurance, telecommunications, and textiles and garments sectors. American Chamber in Bangladesh also made a submission to the USTR expressing the same concerns over trade unionism in Bangladesh exclusive economic zones. Giving a grim picture of state of trade-union practices in Bangladesh, the USBBC said the record of unions in Bangladesh is not good and the unions might more aptly be described as factions fighting each other for political control rather than for workers’ welfare. At best, the situation must be described as chaotic, it added. “More bluntly, the lawlessness and corruption of the unions is hurting the economy and reputation of Bangladesh,” it said in the cogent protest. The Council cited the example of labour problems in Chittagong Port, close to the Chittagong EPZ. For less than 28,000 workers and employees of the Port there are at least 36 unions competing with one another for political gains. Port operations were disrupted for 36 days in 1998, 32 days in 1999 and 20 days so far this year due to labour strikes, hampering overseas trade. Port disruptions fueled by labour unrest have cost the country the equivalent of US$ 1.1 billion per year in foreign exchange earnings, it said, quoting a recent estimate. As a related issue, it cited, implementation of a US$ 500 port modernization project awarded to the US firm Stevedoring Services of America has been held hostage to labour opposition and unrest.
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