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U.S. Trade Representative Michael Froman Comments on President’s Decision to Suspend GSP Benefits for Bangladesh

Washington, D.C. – United States Trade Representative Michael Froman issued the following statement on President Obama’s decision, set out in a proclamation released today, to suspend the eligibility of Bangladesh for tariff benefits under the Generalized System of Preferences (GSP) program:

“Our GSP statute requires certain basic standards for worker rights and worker safety as a condition of eligibility. Over the past few years, the U.S. Government has worked closely with the government of Bangladesh to encourage the reforms needed to meet those basic standards. Despite our close engagement and our clear, repeated expressions of concern, the U.S. Government has not seen sufficient progress towards those reforms. The recent tragedies that needlessly took the lives of over 1,200 Bangladeshi garment factory workers have served to highlight some of the serious shortcomings in worker rights and workplace safety standards in Bangladesh,” said Ambassador Froman. “While taking this action today, the Administration is also initiating new discussions with the government of Bangladesh regarding steps to improve the worker rights environment in Bangladesh so that GSP benefits can be restored and tragedies like the Rana Plaza building collapse and Tazreen Fashion factory fire can be prevented. The Obama Administration is committed to reflecting American values in our trade policy, including with regard to the rights of workers worldwide.”

Background

Congress created the GSP program in the Trade Act of 1974 to help developing countries expand their economies by allowing certain goods to be imported to the United States duty-free. Under the GSP program, 127 beneficiary developing countries are eligible to export up to 5,000 types of products to the United States duty-free. In 2012, the total value of imports that entered the United States duty-free under GSP was $19.9 billion, including $34.7 million from Bangladesh. Top GSP imports from Bangladesh in 2012 included tobacco, sports equipment, porcelain china, and plastic products. The United States will continue to accept imports from Bangladesh following this decision; however, none will be eligible for duty-free treatment under GSP while Bangladesh’s benefits remain suspended.

The suspension of Bangladesh’s GSP benefits, which becomes effective 60 days after the publication of the proclamation in the Federal Register, follows a multi-year, interagency U.S. Government review of Bangladesh’s compliance with statutory GSP eligibility criteria related to worker rights. The review began in 2007, based on a petition submitted by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), and has involved intensive U.S. Government engagement with the government of Bangladesh and various stakeholders in the Bangladesh and the United States. USTR has also held several public hearings on the GSP review of Bangladesh, most recently on March 28, 2013. Hearing testimony and other public submissions related to the GSP review are available here.

The U.S. Government has provided assistance through the U.S. Agency for International Development and the Department of Labor (DOL) for programs that support the strengthening of worker rights in Bangladesh. For example, DOL is providing technical assistance to improve the labor law framework and to improve the ability of labor and management to consult and cooperate. Another effort by DOL, recently announced, would help the Government better enforce fire and building safety standards, as well as train workers’ groups to effectively monitor abatement efforts.

A commitment to protect labor rights is critical to the Obama Administration’s trade policy. USTR has increased monitoring of labor laws and conditions in trade partner countries, as well as engagement through formal mechanisms established by the trade agreements.

• In the Trans Pacific Partnership (TPP), we are seeking to include stronger labor obligations that will further strengthen labor laws in conformity with international standards, enhance mechanisms to address differences when they arise, and broaden bilateral and regional cooperation.

 • The Administration ensured that Colombia effectively implemented its commitments under the Labor Action Plan before the U.S.-Colombia trade agreement entered into force in May 2012. Close cooperation between our two governments continues, especially in the areas of improving labor law enforcement and addressing violence against union leaders.

• In May 2013, the United States requested consultations with Bahrain under the Labor Chapter of the U.S. – Bahrain Free Trade Agreement, to address labor issues.

• In April 2013, the United States and Guatemala signed a comprehensive enforcement plan to resolve concerns detailed in a labor case brought by the United States under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR); the 18-point plan includes concrete actions with specific time frames that Guatemala will implement within six months to improve labor law enforcement, including by strengthening labor inspections, expediting the process for sanctioning employers for labor violations, and improving the monitoring and enforcement of labor court orders.