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President of Bangladesh AMCHAM's press conference |
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August 9, 2000
Dhaka (UNB) - American businessmen urged their government to improve Bangladesh's market access to their market instead blocking it canceling GSP privileges, which may hurt US business interests here. "We believe that cancellation of the GSP would hurt US business in Bangladesh and reduce the EPZ workers' welfare," president of the American Chamber of Commerce in Bangladesh (AMCHAM) Forrest E Cookson told a press conference at a local hotel yesterday (Tuesday). Out of this concern the AMCHAM has submitted its views on the contentious issue of cancellation of GSP privileges of Bangladesh to the Trade Policy Committee of the US government. Ahead of US congressional hearings on a petition for cancelling GSP on the question of labour standards, scheduled for Aug 15, the American chamber has sent a letter to the trade policy body conveying their position. Bangladesh's export to US under GSP amounts to around 40 million US dollars. Bangladesh enjoys a trade surplus of about $1700 million with the United States by means of this preferential trade support. "US business interests in Bangladesh have invested largely (about one billion) in areas where we earn in taka," Cookson said. "We want to see a strong balance-of-payments…to insure that American firms can repatriate their profits to their stockholders." He said the US government should be increasing market access for Bangladesh, not trying to reduce it. "We want to be sure that Bangladesh can export freely to the United States." The AMCHAM chief said diversification of Bangladesh exports would be difficult if the GSP is cancelled, for not granting trade union rights in the EPZs. It would be more dangerous for Bangladesh of being branded as a violator of labour rights through cancellation of the GSP, he cautioned. The US government has threatened Bangladesh cancellation of GSP following US apex trade union coalition AFL-CIO petition to their government about violation of workers' right in the Export Processing Zones (EPZs) in Bangladesh. Cookson said US government might also impose restrictions on the US financial institutions operating in Bangladesh over TU issue. "I'm not sure how far the extent." The Bangladesh Export Processing Zones Authority has directed the establishment of "welfare committees" of workers selected by the BEPZA. "This is an important step towards building labor organizations that provide freedom of association. We believe this is the right initial step," he said. Discouraging trade unionism, the AMCHAM submitted to the US Trade Policy Committee that the EPZs had been successful employing almost one hundred thousand persons. Growth of exports and employment has been at the rate of 25 percent per annum. The formation of the EPZs enabled the Bangladesh government to deal with the difficult problem of industrial labor unions. The industrial unions in both the State Owned Enterprises and private companies had played a devastating role in undermining profitability. It pointed out that the SOEs burdened with excessive labor had run large continuing deficits. Many private companies have experienced such severe labor agitation and demands that factories were closed. Private foreign investors experienced considerable pressure from union leaders. Union activities inevitably raised the cost of doing business through individual demands from labor leaders and overstaffing. To export competitively requires that the labor costs be held to a minimum so that unions driving up costs directly and indirectly were in contradiction to the strategy of increasing exports. "We examined the EPZs and determined that these are not `sweat shops' but instead pay generally higher wages and provide better working conditions than do the average firms outside the EPZs," the AMCHAM has written to the Trade Policy body. It argued that although wages are low in the EPZ in absolute terms, this is a result of Bangladesh being a poor country. Low wages are not the fault of the EPZ investors but rather reflect the economic condition of the country. One concern of the American labor unions the "sweat-shop" conditions in EPZs is not a valid interpretation, the chamber maintained. Freedom of Association for workers means that they have the right to form association, but these are freely formed. "Such an objective is very difficult in Bangladesh due to the history of the trade union movement and the high degree of politicization of the union movement." For the most part unions are not free and the nature of the union systems makes it very difficult to achieve free associations, AMCHAM submitted the view to the US Trade Policy committee. |