EU Mulls Trade Action After Bangladesh Factory Collapse
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The European Union may take trade action against Bangladesh in an attempt to force the country to take workplace safety more seriously, following last week’s factory building collapse which killed more than 400 workers and left thousands injured in Dhaka’s worst-ever industrial disaster.
The warning is the latest sign that governments and retailers are turning up the heat on Bangladesh over the high-risk workplace environment created by the country’s ultra-low wages and lack of safety regulations.
The European Union may take trade action against Bangladesh in an attempt to force the country to take workplace safety more seriously, following last week’s factory building collapse which killed more than 400 workers and left thousands injured in Dhaka’s worst-ever industrial disaster.
The warning is the latest sign that governments and retailers are turning up the heat on Bangladesh over the high-risk workplace environment created by the country’s ultra-low wages and lack of safety regulations.
More than 400 workers have been confirmed dead and scores are missing after the collapse of a factory compound, which occurred in a suburb of the capital Dhaka last week.
Related: Bangladesh Trade, Exports and Imports
EU officials said its actions may include the use of its trade preference system, which gives Bangladesh duty and quota-free access to EU markets.
“The EU is presently considering appropriate action, including through the Generalised System of Preferences … in order to incentivise responsible management of supply chains involving developing countries,” EU foreign policy chief Catherine Ashton and trade commissioner Karel de Gucht said in a statement.
They added:
[quote] The sheer scale of this disaster and the alleged criminality around the building’s construction is finally becoming clear to the world. [/quote]
Bangladesh has one of the largest garment industries in the world, with the sector making up almost 80 percent of the country’s annual exports. The industry provides employment to almost 4 million people, mostly women, making it the world’s second-largest apparel exporter behind China. But reports suggest that workers earn as little as $38 a month.
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Any EU trade action would severely cripple Bangladesh’s garment industry, which exported 9.2 billion euros ($12.1 billion) of goods to the EU last year, according to data from the European Commission.
EU officials are hoping the threat of action would be enough to make Bangladesh improve labour safety standards.
“This is about firing a shot across the bows of Bangladesh to get them to engage on the issue,” an EU official told Reuters. “We want to turn up the diplomatic heat on them and get them to sit down and discuss this with us.”
This is the second time the EU has threatened to take action against Bangladesh. In January, the bloc called on Bangladesh to act immediately to ensure its factories comply with International Labour Organisation safety standards, after a garment factory fire killed six employees.
This followed a November fire at another garment factory that killed over 100 workers and prompted U.S. lawmakers to call for the suspension of their own GSP programme with Bangladesh, but no follow-up action was taken.
Any EU action on Bangladesh’s GSP programme would require the agreement of all 27 member states and could take more than a year to implement.
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Related Infographic: Injuries & Fatalities at the Work Place
