Bangladeshi Trade Privileges Suspended

In a move pleasing to the AFL-CIO, the Obama Administration has taken what I think is an unprecedented step in suspending trade privileges for Bangladesh after the building collapse that killed 1100 garment workers this spring. The labor federation had pushed for such an action all the way since 2007 because of that nation’s consistent disregard for worker safety.

Honestly, this is not that important of a move. Bangladesh is pretty mad about it, but it’s more that they lost face than real economic burden. For one, the garment industry is not covered by these privileges and that’s about 95% of Bangladeshi imports to the U.S. More likely is that the U.S. is hoping European nations do the same, which would put slightly more pressure on Bangladesh since they have more non-garment trade in the country.

The Generalized System of Preferences, which is designed to boost the economies of developing nations, covers less than 1 percent of Bangladesh’s nearly $5 billion in exports to the U.S., its largest market. The benefits don’t cover the lucrative garment sector but Bangladesh’s government was anxious to keep them.

The action may not exact a major and immediate economic toll, but it carries a reputational cost and might deter American companies from investing in the country, one of the world’s poorest.

This is all fine and good. The Bangladeshi government does suck on these issues, what with its murdering union organizers and such. Putting pressure on it is a positive. But the real power behind improving working conditions is the apparel companies. The government needs to pressure the companies to improve conditions. Once again, the only real way to protect workers is to have international safety and health standards that are both legally enforceable in the country of origin and that contractors are still liable for if their subcontractors violate them. One could create these standards with various levels of stringency, but at the minimum, basic workplace safety, exposure, and pollution laws should not only be applicable, but workers around the world should be able to sue the companies in the corporate country of origin.

I know we are nowhere near this happening. But the textile industry has exploited workers for over a century in the worst way. Why things never really improve in that industry is capital mobility while laws and regulations remain tied to place. It is time to make law as mobile as capital.

As it is, the concern is that U.S. companies will invest in Vietnam or Indonesia or Cambodia, taking jobs away from Bangladeshi workers who need them and who are losing them simply because a couple of particularly horrific accidents took place in their country. Those workers want reforms, not to lose their jobs. We need to craft responses that encourage workplace safety, worker empowerment to improve their own lives, and continues to have people work and earn money for their families.