Business, Economics and Jobs

US suspends Bangladesh trade privileges


Bangladeshi volunteers and rescue workers assist in rescue operations 48 hours after an eight-story building collapsed in Savar, on the outskirts of Dhaka, on April 26, 2013.


Munir Uz Zaman

The United States on Thursday announced the suspension of trade privileges for Bangladesh over concerns about safety and labor rights violations in the country's garment industry.

In a letter to Congress, President Barack Obama said the US would withdraw Bangladesh's trade privileges because the South Asian country was "not taking steps to afford internationally recognized worker rights."

Labor unions and Democrats had been pushing for the suspension, especially since the collapse of a factory building in April killed 1,129 workers and a factory fire in November killed 112.

More from GlobalPost: 18 heartrending pictures of the Bangladesh factory collapse's aftermath (PHOTOS)

Bangladesh is among more than 125 countries that receive tariff breaks under the World Trade Organization's Generalized System of Preferences. It is allowed to export nearly 5,000 products duty-free to the US, which purchases approximately 25 percent of Bangladesh's $18 billion in yearly apparel exports.

US Trade Representative Mike Froman said the US would start new talks with Bangladesh to discuss improving workers' conditions so that the country's duty-free benefits could be restored, but didn't say when that might happen.

Bangladesh's Foreign Ministry has called the suspension "harsh" and said it had been put in place despite the concrete actions the country has taken to improve factory safety.

Executive Director of the Institute for Global Labor and Human Rights Charles Kernaghan estimated the suspension would cost Bangladesh about $40 million a year, a small portion of its annual $5 billion in exports to the US.