Bangladesh should urgently engage in dialogue with the USA and the European Union (EU) to address concerns raised by both international stakeholders, experts suggest. This proactive approach is seen as crucial for any future application to the GSP+ application in the EU and USA export markets for its Ready-Made Garments (RMG) products.
European Union Foreign Policy Chief Josep Borrell emphasized the conditional nature of the "Everything but Arms" (EBA) preferences enjoyed by Bangladesh in exporting goods.
In a letter to Prime Minister Sheikh Hasina, Borrell highlighted that EBA preferences are contingent on respecting human rights, including labor rights, as outlined in the international conventions listed in the GSP regulations. He also emphasized that this conditionality applies to any potential future GSP+ application by Bangladesh.
Foreign Secretary Masud Bin Momen acknowledged the challenging situation, stating, "The EU has said that labor rights and human rights must be strictly followed to get the GSP+ facility."
He led the Bangladeshi team in a recent meeting with the EU delegation.
Economist and Executive Director of Policy Research Institute (PRI) Dr Ahsan H Mansur described the situation as "seriously challenging."
He noted that not only the EU but also the United States, through a Presidential Memorandum, is emphasizing the advancement of workers' rights globally, including in Bangladesh.
The new US policy, announced by Secretary of State Antony Blinken, outlines potential sanctions, trade penalties, and visa restrictions for violators of labor rights.
Dr Mansur stressed the need for prompt and effective measures to address concerns raised by both international stakeholders.
Referring to the US warning, he noted that there was pressure on the garment sector in the past, but it's not comparable to the present situation.
The Presidential Memorandum directs chiefs of mission and department officials to directly engage in labor diplomacy, marking a significant shift.
Dr MA Razzaque, Chairman of Research and Policy Integration for Development (RAPID), stated that the US's recent decision is likely to exert considerable pressure on garment exporters, given the historical alignment with the EU.
Meanwhile, a coalition of five international organizations representing over 2,500 brands, retailers, and suppliers expressed concerns about Bangladesh's recently announced minimum wage for RMG workers.
In a letter to the Prime Minister, the group called for a reassessment of the proposed minimum wage and encouraged a collaborative effort to establish a legal minimum wage adhering to international labor and industry standards.
The coalition advocates periodic adjustments to prevent erosion of workers' purchasing power and address wage inequality. The proposed minimum wage of Tk12,500 ($113.45) is considered insufficient and contradicts the government's commitment to decent work standards while neighbouring India pays $171, Sri Lanka $160, Nepal $150, and Cambodia $200.
Bangladesh's minimum monthly wage remains lower than regional counterparts, with concerns raised about the exclusion of certain ILO recommendations from the amended labor law.
7-8 issues from the recommendations of ILO were not included in the amended labour law passed by the parliament. The EU wants to know the reason.
Labor Secretary Md Ehsan E Elahi assured that the omitted recommendations would be included in future amendments.
Fazlul Hoque, former president of BKMEA, emphasized the need for caution and continuous efforts to improve labor standards, noting that Bangladesh's overall labor standard is better than competing countries.
"Bangladesh's overall labour standard is better than competitive countries like Vietnam, Cambodia, China, India, and Pakistan," he said.
"While workers may have justifiable demands for wage increases in light of rising inflation, it is crucial to strike a balance with the industry's capacity to bear such costs," he said.
Syed Nazrul Islam, senior VP of BGMEA, reassured the EU and the US of Bangladesh's commitment to adhering to ILO conventions and expressed readiness for open dialogue to address concerns.