FROM EDEN BUILDING TO MOTIJHEEL

Published: 12:55 AM, 17 January 2021

https://dailyasianage.com/news/252573/gsp-plus-lobbyist-and-eu--market-of-rmg

GSP plus, lobbyist and EU market of RMG

M S Siddiqui Vietnam, one of the key contenders of Bangladesh in the European market, has already amended its labour code, ensuring equal pay and decent work for both male and female workers, and preserving workers' rights to organise. The changes have brought Vietnam's labour law close to the ILO and EU standards. Vietnam also sign FTA with EU to get duty free excess to the market. The EU-Vietnam agreement is the most comprehensive trade agreement the EU has concluded with a developing country. Bangladesh is far behind the competitor in respect of fulling the labour and human rights and signing FTA. The EU is our destination of $18.7 billion or more than a half of the country's total exports.Bangladesh is going graduate from LDC and the existing ‘Everything but Arms’ (EBA) initiative for zero tariff entry of RMG to the market will expire in 2023. Bangladesh is trying to get generalised system of preferences (GSP) plus facility after graduation. As per existing policy of EU, GSP plus will not come automatically, it will come at a cost and the government of Bangladesh will have to comply with some conditions in 12-18 months before graduation from LDC by the year 2024. The EU suggested that the government formulate a time-specific action plan in nine areas to stay eligible for the generalised system of preferences extended under the EBA initiative. The European Union delegation to Bangladesh has categorically said at the Sixth EU-Bangladesh Business Climate Dialogue held at the ministry in Dhaka on 10th January 2021 that Bangladesh would not get GSP plus in the EU market automatically, rather the country would have to address many of the outstanding issues including labour rights. The EU suggested updating on Bangladesh EPZ Labour Act, trade union registration, anti-union discrimination and measures to eliminate forced labour and child labour. The delegation also wanted modification of labour rules and further amendment to Bangladesh Labour Act in line with ILO Convention 87 concerning freedom of association and protection of the right to organise and Convention 98 regarding right to organise and to bargain collectively. They categorically request for a reduction in the minimum membership threshold to 10 per cent from the existing 20 per cent for forming trade unions. EU also recommended that Bangladesh ratify ILO Convention 138 on the minimum age for employment. Bangladesh has drafted a roadmap to improve labour standards – as asked by the EU – to stay eligible for zero-tariff export facilities in the EU market for 10 more years. The roadmap – already sent to the EU within the November deadline – elaborates the actions that the government has planned to execute between 2020 and 2026. As per the ILO conventions, all aged under 15 years are children and they cannot be engaged in any job. But the child age limit is 14 in Bangladesh's law, which lists 38 types of jobs as hazardous for all aged under 18 years. Bangladesh promises to eliminate child labour in all its forms by 2025 and its worst forms by 2021 as it sets December this year to ratify ILO Convention 138 on minimum age and modify the action plan accordingly.

According to the road map, the government agrees to ratify the ILO protocols on minimum age and forced labour by June this year, but seeks time till 2025 to amend the labour law and rules, and adapt EPZ labour rules. The labour law will be amended further by 2026, incorporating changes in the existing labour rules to comply with the ILO and EU labour standards. Under the action plan to be implemented by 2026, the government promises to amend 2015 labour rules by June this year to comply with ILO standards on freedom of association and collective bargaining agents. It also plans to amend the labour act further and adopt EPZ labour rules by December 2022. But, Bangladesh authority insists on maintaining the "existing independent system" for labour management in export processing zones (EPZs) to protect the unique features of those exclusive zones under a different authority, namely the Bangladesh Export Processing Zones Authority (Bepza). They are interested to main two laws [Bangladesh Labour Act and EPZ Labour Act] but EU suggested that a country cannot have two laws. It pledges to simplify the trade union registration process with a database by March this year. The EU wants the government to establish the post of an independent ombudsperson for trade union registration, but Bangladesh finds it not feasible with the country's socio-economic context. The roadmap divulges an elaborate plan on making labour inspectorate fully functional, recruiting 255 labour inspectors by March this year and adding 942 more by December next year.As per the roadmap, the Bangladesh government will develop a guideline to handle child trafficking cases in the next five years. The government will have a child labour survey next year and the relevant unit in the labour ministry will be strengthened. The EU, in its letter to the government earlier, called for steps to eliminate the backlog of cases at labour courts, including in the Dhaka metropolitan area. By December 2022, the government has planned to establish a sufficient number of new labour courts in Narayanganj, Gazipur, Cumilla and Faridpur and in other relevant districts with complete recruitment of manpower. The labour court has pending around 17,000 cases with three labour courts in Dhaka. To clear the backlog of cases on labour disputes, the government seeks time up to December this year to make three newly-established labour courts fully functional with full manpower recruitment through the Public Service Commission. The road map reportedly pledges to combat unfair labour practices and discrimination and provide legal protection to victims. It decides to raise fines for employers for violating labour rights. Now, the penalty is equal for both employers and workers, and the EU presses for a higher penalty for offences of employers. Government also promises to improve industrial relationships. It plans to establish an independent conciliation and arbitration system by 2026, apart from promoting social dialogues incorporating three parties - workers, employers and ministries. Bangladesh has another challenge, after the expiry of the current EBA, obtaining the GSP Plus status. It would also be very difficult because of a strong export base of the country to the EU. The minimum threshold of import value by EU from a GSP eligible country should be less than 7.4 per cent of the total imports from all beneficiary countries during the last three consecutive years on an average. Bangladesh's share was 24.4 per cent in 2018. Bangladesh is the biggest beneficiary of the GSP among all LDCs and is alone utilising 67 per cent of the trade preferential treatment because of higher shipment of apparel items. There is another challenge, in order to qualify for the GSP Plus, a country must meet some criteria. First, a potential country must be considered vulnerable, according to a document of the European Commission on the EU's GSP. A vulnerable country refers to a nation which is not classified by the World Bank as a high-income or upper-middle income country for three

consecutive years. Also, a country must have ratified 27 core international conventions in the fields of human and labour rights, the environment and good governance. The GSP Plus is a special incentive arrangement for sustainable development and good governance. The head of EU mission noted, whilst there was no shortage of law or policies in Bangladesh to regulate trade and investment, the main difficulty was due to the lack of their effective enforcement. The EU delegation also talk about Digital security law of Bangladesh. They closely monitor the human right situation and good governance. The existing law and other situation and higher volume of export of Bangladesh suggested that Bangladesh has poor chance of obtaining GSP plus facility. Bangladesh also should monitor the activities of competitors like Vietnam. Vietnam have fulfilled all EU conditions for GSP plus and signed FTA. Bangladesh must take positive steps to fulfil the conditions of EU and sign FTA. By this time, BGMEA has engaged a global law firm to set the strategies for retaining the duty-free market access to EU. The policy of EU is very transparent and any such lobby may not give any positive output. BGMEA may rather appoint lobbyist to convince Bangladesh authority to sing FTA with EU and with China, the major sources of raw materials of RMG. We have FTA with India under SAFTA, another source of raw materials. Bangladesh also need duty free and hassle free excess to source of raw materials to be competitive. Vietnam already has FTA with China and India. Bangladesh should accept the offer of China for FTA as early possible before the last train leave the station. The writer is a legal economist. Email: mssiddiqui2035@gmail.com