Dhaka: The European Union is considering trade action against Bangladesh, which has preferential access to EU markets for its garments, in order to impose pressure on Dhaka to improve safety standards after a building collapse killed hundreds of factory workers.

Duty-free access offered by Western countries and low wages have helped turn Bangladesh's garment exports into a USD 19 billion a year industry, with 60 percent of clothes going to Europe.

But any action by the EU on Bangladesh's duty-free and quota-free access would require the agreement of all member states and could take more than a year to implement.

"The European Union calls upon the Bangladeshi authorities to act immediately to ensure that factories across the country comply with international labour standards...," the 27-nation bloc said in a statement issued by EU foreign policy chief Catherine Ashton and Trade Commissioner Karel de Gucht.

The Swiss-based Industrial Global Union, which represents 50 million workers worldwide, on Tuesday set a May 15 deadline to finalize with Western retailers a commitment to a fire and building safety plan for Bangladesh. "Funds will be made available for inspections, training and upgrades of dangerous facilities," it said in a statement and called on retailers to renegotiate contracts to pay suppliers more in order to guarantee living wages for workers and to enable technical upgrades to factories.

About 3.6 million people work in Bangladesh's garment industry, making it the world's second-largest apparel exporter, behind China. The industry employs mostly women, some of whom earn as little as USD 38 a month.


In June 2012, Bangladesh's garment exports to the EU rose to USD11.37 billion from USD 10.52 billion a year earlier, according to Bangladesh's commerce ministry. Germany is the main EU market at USD 3.4 billion, followed by the UK at USD 2.13 billion, Spain at USD 1.71 billion and France at USD 1.27 billion.

Bangladesh's next biggest garment export market is the United States, which accounts for 23 percent, or USD4.53 billion.
Late on Tuesday, the EU said it would look at Bangladesh's preferential trade access to the EU market in order to encourage better safety standards and labour conditions. "The EU is presently considering appropriate action, including through the Generalized System of Preferences (GSP) - through which Bangladesh currently receives duty-free and quota-free access to the EU market under the 'Everything but Arms' scheme - in order to incentivize responsible management of supply chains involving developing countries," said the statement.

Ashton and de Gucht said they were deeply saddened by the "terrible loss of life", particularly because it followed a fire in the Tazreen Fashion factory in a Dhaka suburb in November that killed 112 people. "The sheer scale of this disaster and the alleged criminality around the building's construction is finally becoming clear to the world," they said.


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