DHAKA: The pressing pay-hike issue of garment workers turns out as a weapon of ‘trade diplomacy’ for the government to gain the long-delayed duty-free access of apparel products to the United States.
Bangladesh is negotiating with the US authority with a notion that duty-free access will enable its RMG industries to meet the workers’ demand and set at rest on-gain, off-again industrial unrest.
Sources said Bangladesh government and exporters have been lobbying for the last four months to get US Congress’ nod to the Bill titled “New Partnership for Trade and Development Act (NPTDA) 2009” that will ensure duty-free access of Bangladesh apparels to the US market.
The bill will be placed before the US Congress in August.
Sources in the Foreign and Commerce ministries said a Congress committee is reviewing the Bill, and it is now in the final stages of vetting.
The Congressional committee considers Bangladesh’s garment workers as poorly paid, a source said quoting the impression of the US lawmakers.
Besides, Bangladesh is also facing a problem with ‘price fixing’ for its garment products and the duty-free access will allow the sector to overcome the situation. Dhaka conveyed this to Washington in June through a high official of the foreign ministry.
“We told them that we are working on fixing a new wage structure for garment workers,” foreign secretary Mohamed Mijarul Quayes said.
Most garment workers are now paid a minimum wage of Tk 1,662 (US$ 25) per month. Bangladeshi workers have been demanding wages of at least Tk 5,000 (US 70 dollars) a month.
A source in the Commerce Ministry said the NPTDA bill aims to put more fairness in US preference programs by creating a new model that extends duty-free, quota-free preferences, as well as encouraging trade and capacity building among least developed countries (LDCs).
The bill will simplify the generalized system of preferences (GSP) by instituting a new single rule of origin and reviewing the current GSP that was first established back in 1974.
Senator Jim McDermott introduced the bill in the US House of Representatives in November last year to offer greater duty-free facilities to 15 LDC countries, including Bangladesh.
“Without the duty-free access to US market, Bangladesh will face stiff competition,” Abdus Salam Murshedy, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told banglanews24.com.bd Saturday.
“Prices of garment products have dropped, while prices of raw materials were up. So we are under tremendous pressure from price point of view,” said Murshedy, whose own factories were among a large number of RMG units shut down temporarily in the wake of raging violence kicked up by workers demanding wage hike.
According to Export Promotion Bureau, the US imported Bangladeshi products worth over US$ 4 billion in 2009 with 90 percent textile items.
Only about one percent of the export enjoys duty-free preferential access under the existing US-GSP scheme. The average duty rate for the rest of export items was 15.2 percent, EPB added.
BDST: 1710 HRS. JULY 10, 2010
