Representatives from Bangladesh’s apparel sector faced tough questions on labour rights, worker productivity, and wages during a virtual hearing held by the United States International Trade Commission (USITC) on Monday.
Five countries that export garments to the US market were questioned by USITC Chairman David Johansson and his three colleagues during the four-hour hearing.
The USITC is investigating labour practices in five major garment-exporting countries to the US – Bangladesh, India, Cambodia, Indonesia, and Pakistan – at the request of the US Trade Representative.
The inquiry aims to determine if any of these nations gain an unfair advantage through unethical labour practices.
The commission is also investigating how these countries have occupied such a large portion of the US garment industry.
“Every export-oriented apparel factory in Bangladesh has trade union, totalling the number to over 1,400”
Faruque Hassan, president, BGMEA
At the USITC hearing, representatives from the commerce ministry and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) responded to various questions.
Faruque Hassan, president of BGMEA, an association of garment industry owners, answered most of the questions on behalf of Bangladesh.
Apart from this, there will be an opportunity to present written statements till 24 March. The commission will submit its investigation report to the USTR on 30 August.
At the beginning of the hearing on Bangladesh, Commerce Secretary Tapan Kanti Ghosh said workers’ wages have increased by at least 316% in three phases in the last 10 years.
The production cost per unit in the apparel industry has also increased significantly. However, maintaining a competitive edge in the US market for Bangladesh requires more than just low product prices.
He added that the government is trying to overcome the challenges faced by Bangladesh’s garment industry in various ways.
A USITC commissioner asked whether the average work efficiency and productivity of workers in Bangladesh is lower than that of Cambodia. He also questioned whether workers in Bangladesh are capable of producing more goods despite receiving lower wages than in Cambodia.
In response, Faruque Hassan said, “It is not possible for me to say whether Bangladeshi workers are more efficient than Cambodia. Bangladesh’s labour productivity is lower than that of China, Vietnam, and Indonesia.
“Bangladeshi garment industry owners have invested heavily in modern technology machines in the last 20 years. So, the amount of manual labour done by workers in Bangladesh is minimal.”
Talking with TBS Faruque Hassan later said, “We will analyse the Cambodian workers’ efficiency in line with our workers.”
He acknowledged that Bangladeshi workers needed to improve their efficiency to improve productivity.
A USITC commissioner asked why Bangladesh is not allowing trade unions in the Bangladesh Export Processing Zone.
In response, Faruque Hassan said there are trade unions in every apparel factory located in EPZ, while the names are different, workers are choosing their leadership through the elections.
The BGMEA president also mentioned that they were also asked about why the number of trade unions in Bangladesh is lower than Cambodia.
In response, he said in Cambodia, factories have a number of trade unions and that might put their number higher than Bangladesh. However, every export-oriented apparel factory in Bangladesh has a trade union, totalling the number to over 1,400, he said.
The BGMEA president said there is no doubt that Bangladesh is among the few major exporters that has done fairly well in terms of its apparel export to the US in the past decades.
Referring to OTEXA data, Faruque Hassan said the data shows that during 2013-23, Bangladesh’s unit price gained 0.99%, while the global average unit price paid by the US declined by 0.04%.
The BGMEA president said Bangladesh’s unit price to the US was $2.74 in 2017, which increased to $3.23 in 2023.
“In recent years our cost of production has gone exorbitantly high. The price of electricity has gone up by 25%, gas price increased by 286.5%, diesel by 68%, and similar impacts on transport and other cost factors are notable.
“From July 2023 the interest rate on lending is adjusted upward to curb inflation, which has pushed our cost of finance further up, leading to increased cost of production and cost of goods. Also, fees like different registration and certification fees, municipality and city corporation payables, have significantly increased.”
Faruque Hassan said, “If we look at the gradual wage increase since 2010, we can see the aggregate increase in minimum wage is 652%. This time the basic-gross wage ratio has also increased from 51.25% to 53.60%, resulting in higher allowances the workers are entitled to like – overtime allowance.
