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We don’t need GSP, declares Tofail

  • Senior Correspondent,
    Published: 2014-05-04 21:40:30 BdST


An apparently angry commerce minister has said Bangladesh does not need preferential facility under GSP in the US market.

Tofail Ahmed said on Sunday there had been a lot of talk on the GSP but they produced no results.

“We don’t want...I say we don’t want... too much talks about GSP...we don’t need GSP anymore,” he said, citing that Bangladesh used to get only $30 million GSP benefits before it was suspended in June last year.

The minister was speaking at the launch of the New York-based Tau Investment Management in Bangladesh.

The US suspended the GSP privilege that some of Bangladesh’s products had been enjoying in the wake of the Rana Plaza building collapse that killed more than 1,100 people, mostly workers.

The main export item, ready-made garments, never enjoyed the benefit.

The worst-ever building collapse evoked worldwide concern and buyers and retailers formed an ‘Accord’ to inspect factories to look into its structural as well as fire safety issues.

They also advise the closure of factories if they find them in any way hazardous.

The commerce minister said on Sunday he got a call from Chittagong saying an ‘Accord’ team was out to shut down factories.

He said all “must understand that things will not change overnight”.

He said as the second largest garment exporter, more than four million people - most of them were women - worked in garment factories in Bangladesh.

If inspectors found faults in factory buildings and order immediate closures, hundreds of workers would be rendered jobless, he said.

“They will be out on the streets. There will be social unrest, which will not be good for Bangladesh,” he said.

“We don’t get any extra benefit from the US market,” he said.

He said years of efforts to persuade the US to grant duty-free access of the country’s market to Bangladeshi garments had been rebuffed.

“We are getting (this privilege) from everywhere except the US,” he said.

The issue came to the fore in recent weeks one year after the Rana Plaza tragedy.

The US administration rolled out an action plan to improve factory safety and ensure workers rights as a pre-condition to restore the GSP privilege.

But Finance Minister Abul Maal Abdul Muhith and Bangladesh’s ambassador to Washington Akramul Qader sharply criticised the US stand.

Muhith flayed the US decision saying it was dictated by political considerations, while Qader said, a few days before the first-ever Ticfa meeting, that the US had “put the workers in jeopardy”.

Officials say Bangladesh would raise the GSP issue at Ticfa, formed to remove bilateral trade and investment obstacles.

But the Assistant US Trade Representative for South Michael Delaney, who led the US side in the Dhaka meeting, said the GSP solution would be based on a WTO decision.

More specifically, he told a press conference, it would be dealt with by the ongoing Doha Round.

The commerce minister on Sunday said Bangladesh paid $ 828million as tariff in the US market last year.

He said Bangladesh was paying a high 15.61 percent exports tariff while Vietnam was giving 8.38 percent, India 2.29 percent, and Indonesia 6.30 percent.

He said Bangladesh’s products could become “more competitive” if US gave the GSP.

“We could export more,” he said.

He said China and Japan had shown interest in investing Bangladesh so that rundown factories could be spruced up.

He said land had been identified for China’s industrial park, hoping it would be built within three years.

‘Tau Investment’ plans to raise $1 billion to invest in garment factories in Bangladesh, China, Vietnam and Cambodia, besides other sectors in several countries.

Its founder and chief executive Oliver Niedermaier said while launching it in Dhaka on Sunday that they could fix poorly managed factories in a way that helped workers, the environment and investors.

He said their skills and technologies would “decrease inefficiency” of a rundown factory and “increase productivity”.