President Obama on Thursday announced Bangladesh would lose some of its U.S. trade privileges due to risky conditions and labour violations in its garment industry.
The government said it would no longer allow duty-free imports of certain products made in Bangladesh under a program that helps encourage trade with developing countries by providing breaks on tariffs.
The trade decision comes as Bangladesh is facing mounting international pressure to improve working conditions after a series of fatal fires last year killed hundreds, and a building collapse in April killed over 1,100 workers. Almost all of the accidents have happened in its apparel industry. Bangladesh is the fourth largest exporter of clothes to the U.S., behind China, Vietnam and Indonesia.
However, the U.S. decision isn't expected to affect clothing imports, because apparel isn't covered under the duty-free program.
The program is part of a global effort overseen by the World Trade Organization and applies to imports from developing countries. Thursday's curbs is likely to affect imports of tobacco products, sports equipment, china and plastic products from Bangladesh, according to the country's embassy.
In 2011, the U.S. imported $26.3 million worth of goods that got duty free breaks under the program, according to trade records. That's less than 1% of the more than $4 billion of Bangladesh exports to United States.
The government of Bangladesh described the development as "unfortunate."
The U.S. program granting duty-free status to developing nations was already set to expire July 31.
The program can be extended only if Congress acts by the deadline, which doesn't look likely so far, according to congressional aides and lobbyists.
In 2011, Congress renewed the program retroactively. But the dire budget situation combined with forced spending cuts could reduce enthusiasm for a trade program that eats into U.S. revenue.
Related Stories
