x Abu Dhabi, UAEFriday 28 July 2017

Bangladesh will suffer from US trade duties

The US is wrong to tighten tariffs against Bangladesh, even in a minor way.

With good intentions but little sophistication, the US government has reacted in exactly the wrong way to the April 24 collapse of a garment factory in Bangladesh.

The Rana Plaza disaster in Dhaka killed 1,129 workers, and injured more than twice as many. The case energised liberal protesters around the world, who have long claimed that stylish brand-name clothing comes to rich consumers so cheaply because of sweatshop conditions in poor countries.

Now, propelled by the zeal of numerous US lawmakers, President Barack Obama's administration has imposed new trade duties against Bangladesh, raising tariffs on some goods from that country.

This will do more harm than good to Bangladesh's hard-pressed workers. Fortunately, however, the change will not affect the US retail price of clothing from Bangladesh - US politicians will not touch that live wire. Instead, the tariff preference that Bangladesh will lose covers only 1 per cent of the goods the country sells to the US, mainly golf gear, tobacco and ceramics. As the tariff pushes up the US price of those goods, sales will fall and some Bangladeshi workers may well lose their jobs.

Four million people, most of them women, work in Bangladeshi garment factories, twice as many as a decade ago. The country of 150 million is very poor - annual GDP per capita, Dh7,350, is the world's 194th-best. Still, the economy has been growing very rapidly in recent years.

But that growth has entailed working conditions that permit tragedies like the Rana Plaza collapse. And unfortunately Bangladesh's leaders have rarely exerted themselves for workers' welfare. Rana Plaza owner Sohel Rana, for example, has close ties to the governing Awami League.

Now public pressure in richer countries is pressing international retail chains to demand that Bangladeshi exporters treat their workers better. Yesterday there were protests to that end in several western cities.

One result of this movement has been the Bangladesh Accord on Factory and Building Safety, now signed by more than 50 international retail chains, binding them to require suppliers to provide independent factory inspections and allow an increased role for unions. Companies that have not signed on, most notably Wal-Mart, have promised comparable measures of their own. In an age of growing awareness of corporate social responsibility, companies cannot ignore pressure of this type.

This US government measure has little to recommend it. What Washington could more sensibly do is lower the substantial existing tariffs on clothing from Bangladesh - and welcome consumers' efforts to demand fair treatment for poor workers in that country.