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Recommendations on initiatives to be taken by bangladesh to regain the u.s. generalized system of preferences (gsp) facilities

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Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities

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Recommendations on initiatives to be taken by bangladesh to regain the u.s. generalized system of preferences (gsp) facilities

  1. 1. RECOMMENDATIONS ON INITIATIVES TO BE TAKEN BY BANGLADESH TO REGAIN THE U.S. GENERALIZED SYSTEM OF PREFERENCES (GSP) FACILITIES ECO 502 Macroeconomics and Business Forecasting Section: 1
  2. 2. Group Members 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 2 ID Name 13264078 Shahriar Rawshon 13264070 Shahreen Shabnam 13164136 Anjuman Ara Islam 13164129 Monjuri Akter Laboni 13164031 Sonia Sultana
  3. 3. Outline 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 3 Objective of Project Methodology and Limitation of the Project Introduction to GSP and Its declaration of Suspension for Bangladesh Reasons for the Suspension of GSP Impact of the Suspension Plan to Regain the GSP Facilities Progress in Getting Back GSP Facility Recommendations for Getting Back GSP Facility
  4. 4. Objectives of the project 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 4 Gather an understanding of the context which led Bangladesh to lose the US GSP facilities. Measure the impact of this cancellation on Bangladesh economy. Capture the steps taken by Bangladesh till date to regain the facilities. Highlight the gaps which are preventing Bangladesh from regaining the facilities. Recommend steps which will ensure that Bangladesh regain the GSP facilities.
  5. 5. Methodology and Limitation Methodology • Theoretical study based on secondary sources: • Journals, Newspapers • Research articles, Thesis papers • Online news and survey reports, relevant websites • Books and articles Limitation • Information gap between different data sources 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 5
  6. 6. Declaration of GSP Suspension for Bangladesh  27 June 2013 - a bolt from the blue  US President Barack Obama: “I have determined that it is appropriate to suspend (GSP facility for) Bangladesh because it’s not taking steps to offer internationally-recognised rights to workers in the country.”  04 June 2013, Foreign Minister Dr. Dipu Moni: “The review of the GSP facility for Bangladesh in the US market is continuing. The hearing on it has concluded. A Bangladeshi team comprising officials from the foreign ministry, labour and employment ministry, and commerce ministry have discussed the issue with the US authorities. I am hopeful that the USTR will take a positive decision on this.”  GOB reaction: “unfortunate” and “harsh”; outcome of a protracted negative campaign.  Foreign Office statement: “Indeed a section of people, inside both Bangladesh and the USA, had long been campaigning to this effect. Bangladesh was absolutely “respectful of a trading partner’s choice of decisions” but “expresses its deep concern that this harsh measure may bring in fresh obstacles in an otherwise flourishing bilateral trade”. 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 6
  7. 7. What is GSP?  The U.S. Generalized System of Preferences (GSP)  instituted on January 1, 1976, by the Trade Act of 1974  program designed to promote economic growth in the developing world  providing preferential duty-free entry  up to 5,000 products imported from one of 123 designated beneficiary countries and territories 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 7
  8. 8. GSP (cont.) 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 8 Eligible products for duty-free treatment under GSP include Most manufactured items Many types of chemicals, minerals and building stone Jewellery Many types of carpets Certain agricultural and fishery products Not-eligible products for duty-free treatment under GSP include Most textiles and apparel Watches Most footwear, handbags, and luggage products
  9. 9. Suspension of GSP 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 9 US suspended trade privileges for Bangladesh This decision brought tariffs back on Bangladesh's export-garment The suspension underlined lack of improving factory conditions.
  10. 10. Reasons for the suspension of GSP 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 10 Incident of Tazreen's fire Incident of Rana Plaza's collapse AFL-CIO pressure 0ther reasons- • Failure of prosecution of the murder of labor leader • The Govt. treatment of Professor Yunus • US disappointed with Bangladesh's governance • Bangladesh-US relationships
  11. 11. Impacts of the suspension 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 11  The suspension does not directly affect the country’s multi-billion-dollar clothing exports to the US due to lack of GSP.  Non-garments export is less than 1% of Bangladesh’s exports to the US ($4.9 billion).  the European Union has expressed the opinion that a decision to withdraw the Generalised System of Preferences for Bangladesh should be avoided
  12. 12. Plan to regain the GSP facilities Bangladesh Action Plan 2013 to reinstate GSP • The United States Government encouraged the Government of Bangladesh (GOB) to take significant actions to provide GSP benefits 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 12 Government Inspections for Labour, Fire and Building Standards • Develop, in consultation with the International Labour Organization (ILO) to increase the number of government labour, fire and building inspectors, improve their training and credible inspections • Create a publicly accessible database • Increase fines and other sanctions, including loss of import and export licenses
  13. 13. Continue... 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 13 Ready Made Garments (RMG)/Knitwear Sector • Continue to expeditiously register unions that present applications • Register non-governmental labour organizations • Publicly report information on the status and final outcomes of individual union registration applications, • Develop and implement mechanisms, including a training program
  14. 14. 29/08/2014 Continue.... Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 14 Export Processing Zones (EPZ) • Commit to a timeline for expeditiously bringing the EPZ law into conformity with international standards • Issue regulations that, until the EPZ law has been repealed or overhauled Shrimp Processing Sector • Actively support ILO and other worker-employer initiatives in the shrimp sector according to the memorandum of agreement on the month of march 2013 • Publicly report on anti-union discrimination or other unfair labour practice complaints received and labour inspections completed
  15. 15. Progress in getting back GSP facility 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 15 Terms and conditions Working on US Action plan Safety standard for garments factory workers Assurance of security in The Workplace Formulation and enacted laws to secure workers right
  16. 16. Progress in getting back GSP facility(cont…) 29/08/2014 Terms and conditions Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 16 • Improvement of labor situations; • Safety standard for garments factory workers; • Assurance of security in the workplace.
  17. 17. Progress in getting back GSP facility(cont…) Working on US Action plan 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 17 • Protecting workers right; • Fulfilling the preconditions; • Imposition of stiffer penalties for the violation of labor laws.
  18. 18. Progress in getting back GSP facility(cont…) Safety standard for garments factory workers 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 18 • Appointed additional inspectors; • Setting up of fire station; • Suspended the operations of 20 factories;
  19. 19. Progress in getting back GSP facility(cont…) 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 19 Assurance of security in The Workplace • Anti harassment committee; • Gender committee; • Anti sexual and physical abuse committee; • HRM department; • Compliance department; • Workers participation committee.
  20. 20. Progress in getting back GSP facility(cont…) 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 20 Formulation and enacted laws to secure workers right • Adapted 'Labor law 2013’ • Registered 120 new unions in the garments sector • Update The EPZ laws to stop harassment and arrest of labor organizers
  21. 21. Recommendations for getting back GSP facility 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 21  There should be a two-fold strategy for Bangladesh to getting back GSP facilities. 1. Work on the Bangladesh Action Plan 2013 and 2. Leverage Bangladesh’s importance to the US government for negotiation.
  22. 22. Recommendations for getting back GSP facility(cont…) 29/08/2014 1.Work on the Bangladesh Action Plan 2013 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 22 • Along with the suspension of the GSP facilities, the US administration provided a “roadmap” to regain the GSP for which Bangladesh has to undertake the following steps: • Enforcement of building code, • Reformation of existing labour, • Upgrading law for EPZs, • Allow registration of unions and • End harassment and arrest of labour leaders, workers and activists.
  23. 23. Recommendations for getting back GSP facility(cont…) 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 23 Bangladesh should increase the momentum at which changes are made at present. The government should continuously engage all stakeholders to update them on the initiatives undertaken To convince stakeholders about the strong intent of Bangladesh government and business leaders in the RMG sector to bring about positive changes in the overall working conditions backed up with actions To convey the message that the actions will not stop once the GSP facilities are reinstated, but will continue to take place They also need to win the confidence of the US administration and strongly communicate that while Bangladesh is doing its part US should reciprocate by reinstating the GSP facilities based on what is being done, rather than suspending the facilities based on what is yet to be done.
  24. 24. Recommendations for getting back GSP facility(cont…) 2. Leverage Bangladesh’s importance to the US government for negotiation. 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 24 • Despite the suspension of GSP, the US has been appreciative of the current government’s strong action to root out the terrorist elements from Bangladesh. • There is a common perception that Bangladeshi diplomats are not as effective as foreign diplomats on the negotiation table. • Irrespective of the government elected in Bangladesh, the country is strategically important for the US because of its geographical location. • Many strategists suggest that the US is interested to constitute a kind of security (non-military) alliance to confront North East Asia’s instability and China’s supremacy in the Asia-Pacific region with India, Australia, Philippines and Japan. Bangladesh and Myanmar could also be included in the loop. • Bangladesh provides the largest peacekeeping personnel at the UN conflict zones and is well appreciated internationally for their performance
  25. 25. Conclusion 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 25
  26. 26. Thank You Everyone 29/08/2014 Recommendations on initiatives to be taken by Bangladesh to regain the U.S. Generalized System of Preferences (GSP) facilities 26

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