EU trade privilege depends on human rights record

10 Jan 2021 12:00 PM
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Bangladesh must meet the European Union's new criteria on human privileges to retain its duty-free market access to the bloc due to the EU looks to improve accountability and fight impunity, said a top diplomat. 

The EU is scheduled to evaluate the trade privilege in light of the individual rights situation following the bloc became more wary of it.

"As a major beneficiary of the EBA (Everything but Arms), Bangladesh will have to comply with the new requirements on the human privileges to enjoy the power on exports," explained Rensje Teerink, brain of the EU Delegation to Bangladesh.

Some 61 % of Bangladesh's exports are destined for the EU.

Garment export, which makes up about about 85 % of the national revenue abroad, rose from $12.49 billion in fiscal 2009-10 to $27.95 billion in 2019-20, regarding to a recently available study by the Bangladesh Garment Manufacturers and Exporters Association.

Of the total export, more than 90 % are apparel items and 96.4 % goods are included in the GSP scheme.

On December 7, the European Council adopted a decision and a regulation establishing a worldwide human legal rights sanctions regime.

This allows the EU to focus on individuals, entities and bodies - including state and non-state actors - responsible for, involved in or connected with serious human rights violations and abuses worldwide, irrespective of where they occurred.

"The new regime permits us to impose sanctions no matter where human privileges violations and abuses take place…," said Josep Borrell, large representative of the EU for foreign affairs and reliability policy and vice-president of the European Commission.

"…without having to create brand-new, country-certain sanctions regimes as we had to do as yet. This means we have new tools to improve accountability and attack impunity," he explained in a blog.

The EU may also respond to individual rights violations by suspending production aid or withdrawing EBA trade preferences, Borrell said.

"So, Bangladesh must protect the EBA service by complying with the brand new conditions of human privileges," Teerink said within an exclusive interview with The Daily Star recently.

"The Director-Standard Trade and DG Career of the EU have been closely monitoring the individual rights circumstance in Bangladesh to be assessed for another eligibility."

The brand new condition on human rights has been communicated with the ministries of commerce, labour and employment and foreign affairs, she said.

Retaining the trade privilege in the EU is certainly important for Bangladesh for the reason that current monetary growth of the united states happened significantly riding in the bloc's generous trade gain during the last five decades.

Once the nation graduates to a growing country from the least-developed country (LDC) grouping in 2024, Bangladesh will face a lot of competition from other countries in the EU, and there's a likelihood of losing the marketplace share due to erosion in choice, the envoy said.

"It is very difficult to say exactly how much Bangladesh would be affected due to graduation," Teerink said, adding that the EU would stay a major market for Bangladesh even following the graduation.

Following the expiry of the existing EBA, acquiring the GSP In addition status to the EU by Bangladesh would as well be very hard because of a solid export base of the country to the EU.

For instance, the minimum amount threshold of import worth by the bloc from a GSP eligible nation should be significantly less than 7.4 per cent of the full total imports from all beneficiary countries over the last three consecutive years on an average. Bangladesh's talk about was 24.4 % in 2018.

In fact, Bangladesh is the most important beneficiary of the GSP among all LDCs and is alone utilising 67 % of the trade preferential treatment due to bigger shipment of apparel items.

In order to be eligible for the GSP In addition, a country must encounter some criteria.

First, a potential region must be considered vulnerable, according to a document of the European Commission along the EU's GSP.

A vulnerable country refers to a nation which isn't classified by the Globe Lender as a high-salary 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 particular incentive arrangement for sustainable creation and good governance. It slashes tariffs to zero for vulnerable low and lower-middle-income countries.

Bangladesh has ratified virtually all major conventions aside from a simple convention of the International Labour Organisation's Minimum Years Convention.

In major progress, Bangladesh has amended the labour law, decreasing the threshold of the consent of employees required for the forming of trade unions to 20 % from 30 %.

"I think that that is an effective and commendable threshold, but it is not plenty of," Teerink said, adding that the threshold wouldn't normally be able to guarantee the freedom of association of personnel.

To wthhold the EBA, Bangladesh needs to follow the labour roadmap recommended by International Labour Company (ILO).

"The EBA is a such a present that is quota-free and duty-free usage of a country, we must be certain certain basic human being rights and labour will be respected while products enter europe markets," Teerink said.

"That is why we've this EBA engagement to find where is Bangladesh on trade."

If certain basics are not respected, there would be unfair competition, she said.

There will be a crucial meeting about the improvement about labour rights this year.

She said there is without doubt that Bangladesh has been progressing economically regardless of the fallouts of the Covid-19 fallouts.

"We will be incredibly proud as Bangladesh is certainly going forwards to be graduated to be a developing country."

She praised the government's work to roll out the stimulus packages for industries.

Bangladesh's economy must be diversified, and currently, it is extremely much dependent on the ready-made garment industry.

"I hope the federal government will address it found in its Eighth Five-Year Method," Teerink said.

The ease of conducting business is an essential area to increase the organization climate in the united states, based on the diplomat.

Bangladesh, along with other LDCs, has been pressing for an expansion of the existing GSP status for 10 more years because of the fallouts of Covid-19.

Even so, she said she had not been much alert to the EU's situation in this regard.

Many local trade experts have suggested signing a free trade agreement (FTA) with the EU.

Responding to this, Teerink said, "Currently, this is not in the debate of the DG Trade. Probably in future, the FTA issue could be discussed."

The problems of responsible business behaviour by retailers and makes of the EU and the low-price issue of garment items of Bangladesh will be discussed within the next assembly of Sustainability Compact, that was signed between Bangladesh and the bloc in 2013 following the Rana Plaza building collapse.

"Very crucial homework concerns will be discussed on the meeting as much Bangladeshi garment suppliers have already been afflicted by unusual deferral obligations by EU merchants and brands through the pandemic," she added.