This document discusses recommendations for Bangladesh to regain its Generalized System of Preferences (GSP) facilities from the United States. The US suspended Bangladesh's GSP status in 2013 due to concerns over workers' rights. The suspension impacted Bangladesh's economy. To regain GSP eligibility, Bangladesh created an action plan to address US concerns and improve safety, inspections and unions. The document recommends Bangladesh both continue progressing on its action plan and leverage its strategic importance to negotiate with the US for restored trade benefits.

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. Group Members
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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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ID Name
13264078 Shahriar Rawshon
13264070 Shahreen Shabnam
13164136 Anjuman Ara Islam
13164129 Monjuri Akter Laboni
13164031 Sonia Sultana

3. Outline
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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. Objectives of the project
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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. 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
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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”.
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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
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8. GSP (cont.)
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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. Suspension of GSP
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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. Reasons for the suspension of GSP
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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. Impacts of the suspension
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 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. 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
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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. Continue...
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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. 29/08/2014
Continue....
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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. Progress in getting back GSP
facility
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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. Progress in getting back GSP
facility(cont…)
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Terms and conditions
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• Improvement of labor situations;
• Safety standard for garments
factory workers;
• Assurance of security in the
workplace.

17. Progress in getting back GSP
facility(cont…)
Working on US Action plan
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• Protecting workers right;
• Fulfilling the preconditions;
• Imposition of stiffer penalties for
the violation of labor laws.

18. Progress in getting back GSP
facility(cont…)
Safety standard for
garments factory workers
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• Appointed additional inspectors;
• Setting up of fire station;
• Suspended the operations of 20
factories;

19. Progress in getting back GSP
facility(cont…)
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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. Progress in getting back GSP
facility(cont…)
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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. Recommendations for getting
back GSP facility
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 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. Recommendations for getting
back GSP facility(cont…)
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1.Work on the Bangladesh Action
Plan 2013
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• 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. Recommendations for getting
back GSP facility(cont…)
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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. Recommendations for getting
back GSP facility(cont…)
2. Leverage Bangladesh’s importance to the US
government for negotiation.
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• 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. Conclusion
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26. Thank You Everyone
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