The latest assertion of the US envoy in Bangladesh that restoration of the Generalised System of Preference (GSP) largely depends on the improvement of the country’s labour standard and factory conditions is not a new thing. She reiterated the so-called precondition a few days after the finance minister’s statement that the government would renegotiate GSP restoration with the Donald Trump administration of the USA. The US suspended GSP for Bangladesh in the middle of 2013. Some 243 Bangladesh products used to enjoy the GSP facility. This covered one per cent of the country’s total export to the US which increased to $6.22 billion in FY16, registering 7.61 per cent growth over the previous fiscal year’s export of $5.78 billion. Moreover, GSP, the oldest trade preference scheme, excluded Ready-made garment (RMG), the leading exportable item of Bangladesh, was excluded from GSP facility. But the suspension of GSP was due to the RMG sector. The Rana Plaza disaster, which killed more than 1,000 garment workers and sparked global outcry, drove the US administration to suspend the trade preference as a symbolic penalty. The US placed a set of 16-point conditions, focusing on better labour standards, for Bangladesh to fulfil for regaining the trade preference. While the door of renegotiation for GSP is always open, the linking of labour issue with international trade is flawed. The World Trade Organisation (WTO) has make it very clear that labour-related issues would not be the purview of the multilateral trade negotiations. So, labour principles and standards are not the subject to WTO rules and disciplines. At the first ministerial meeting of the WTO in 1996 in Singapore, the issue of labour standard was taken up and addressed in the ministerial declaration. The members defined the role of the multilateral trade body on the issue saying that the International Labour Organisation (ILO) is the competent body to negotiate labour standards. The declaration noted that the WTO “rejects the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question.” ILO, an arm of the United Nations founded in 1919, is the multilateral organisation with the responsibility to deal with labour issues. For nearly 90 years, the organisation has been working to frame conventions to regulate labour standards. Eight ILO conventions define four ‘core labour’ standards. These are: freedom of association, no forced labour, no child labour and no discrimination at work (including gender discrimination). Nevertheless, developed countries, led by the US, have long been lobbying with the WTO to make provisions for imposition of trade sanctions on countries that don’t enforce international labour standards. The inconclusive Doha Round multilateral trade negotiations of WTO also excludes labour related issues. The developed countries now want to scrap the Doha negotiations and introduce labour standard as a new issue covering e-commerce, SMEs and global value chain, fisheries subsidies and domestic regulation in services. Labour standards may appear to be simple tools of dealing with workers. But these are actually very complex and cover a wide range of things: from child labour and forced labour to the right of organising trade unions and strikes, to minimum wages, health, safety and working terms and conditions. Moreover, any attempt to apply uniform labour standards in all fields throughout the world ignoring the differences in the level of development as well as socio-political-cultural conditions in various locales will not be practical at all. The United States claims use trade preference laws helps improve workers’ conditions in developing countries. GSP is one of the preferential programmes – and also the oldest one. By linking labour issue with trade preference, the US clearly defies WTO principle. This is also an example why developed countries are trying to bring the labour standards in the WTO as a new issue. Once labour standards become a subject to negotiation in WTO, it will be very easy for the developed nations to impose stringent conditions on developing countries regarding labour-related issues. AFL-CLO, the umbrella federation of the US trade unions, argues that the most efficient way to protect labour right is to reward or punish a certain product through the global trading system. This does not obviously serve the cause of global trade system but actually promotes US interest. Again, some experts believe that both developed and developing countries do not really look at the linkage of labour standards to the international trade from a fair and rational perspective. Developed countries consider the low labour standards in the developing countries as ‘social dumping’ while developing countries find it as a new kind of trade barrier termed as ‘blue barrier.’ Thus, both actually want to protect their own trade interests at the cost of labour. One thing is clear. In the coming days, pressure from the developed world will increase to include labour standards in WTO agenda. Two mega-regional trading agreements, Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP), contain labour standards as important components of the agreements. And these two mega-regional trading agreements are spearhead by the US. However, the developing countries as well as the Least Developed Countries (LDCs), including Bangladesh, should improve their labour standards by ensuring better working conditions at workplaces. It is for the greater interest of these countries and for their sustainable development. Keeping millions of workers poor and vulnerable, these countries can’t be competitive in the long run. While Bangladesh may use the flawed link of trade and labour as a bargaining chip with the US for the time being, more efforts are essential to improve skill and standard of their workforces.
