E.U. considers trade limits on Bangladesh

May 1, 2013

The European Union is considering moves against Bangladesh, including restricting trade access to the European single market, in an attempt to press the country to improve its labor practices after last month’s deadly factory collapse.

Bangladeshi police said Wednesday that the death toll in the Rana Plaza disaster on the outskirts of Dhaka on April 24 had passed 400, with hundreds still missing. On Tuesday, rescuers said they had given up hope of finding more people alive.

At the Vatican, Pope Francis said he was shocked by a headline that said some of the workers’ monthly salaries were the equivalent of 38 euros, or $50.

“This was the payment of these people who have died . . . and this is called ‘slave labor,’ ” he said. Vatican Radio said the pope made the remarks during a private Mass at the Vatican.

In a brief statement, Catherine Ashton, the E.U. foreign policy chief, and Karel De Gucht, the bloc’s trade commissioner, said: “The E.U. is presently considering appropriate action, including through the Generalized System of Preferences — through which Bangladesh currently receives duty-free and quota-free access to the E.U. market under the ‘Everything But Arms’ scheme — in order to incentivize responsible management of supply chains involving developing countries.”

About 3.6 million people work in Bangladesh’s garment industry, making it the world’s second-largest clothing exporter after China. The bulk of its garment exports — 60 percent — goes to Europe.

E.U. officials acknowledged suspending Bangladesh from the bloc’s preferences scheme, which allows the country’s large textile industry to export to the European Union free of import duties, would be an extreme measure, previously reserved for countries such as Burma as part of a sanctions regime.

But the European Commission decided to consider suspension after previous warnings about working conditions, which came as a result of two fires in the past six months that killed dozens in garment factories, went unheeded.

Officials acknowledged a suspension was unlikely; it requires approval of the European Union’s 27 member states, as well as the European Parliament. But they hoped the threat of such a move would shock Bangladeshi authorities and European companies doing business there into action.

“We will put a fire under their feet a little bit,” said one commission official.

Among the moves Brussels is hoping for is outreach from Bangladeshi authorities for E.U. assistance toward implementing international labor standards, particularly those in the United Nations’ International Labor Organization conventions.

With a spotlight on their business ties in Bangladesh, Western retailers that used suppliers housed in the doomed building have begun offering ill-defined compensation to the victims.

But aid groups have been unimpressed by some of the vague promises, such as British discount retailer Matalan’s pledge to “provide financial and other support.” The offer to those affected fell short of fulfilling victims’ rights, said the British anti-poverty group War on Want.

Kik, a German discount clothing retailer that one of the companies in the collapsed factory said it supplied, could not be reached for comment Wednesday. Kik has previously said it set up a $1 million fund to help those affected by a fire at a Pakistani factory in September, where 260 people died. Kik bought jeans from the factory in Karachi.

Kik was also featured in a German television documentary last month alleging that a supplier in Bangladesh used child labor. Kik said it had investigated and found no evidence of children younger than 14 working but said it had ended a relationship with a supplier in Bangladesh after an order placed there had been passed on to an illegal subcontractor.

— Financial Times

Wilson reported from Frankfurt, Germany. The article also includes reporting from news agencies.

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