By Dwaipayan Regmi, TON Nepal

American privilege cut off for Bangladesh, motive and Bangladesh’s Trade now

President Obama made the decision to suspend American trade privileges for Bangladesh in 2013.This was stated to be because of increasing American concern about Bangladesh regarding labor rights and workers' safety. Following the intensified incident in Bangladesh, where more than 1200 people died after a factory collapsed in one of the global garment industries, the decision was supposed to be taken. It was further stated that Bangladesh was not taking any steps to afford internationally recognized rights in their nation too.

This suspension abolished tariff breaks which were granted to something around 35 million American dollars, where breaks would cover the goods that the United States had been importing free of tax. Now, since they didn't apply to Bangladesh's textile industry, which sold more than 4.5 billion dollars of goods to American states, that accounted for around 90 percent of Bangladeshi exports there.

The American Embassy clearly states that this nation has exported around USD 1.5 billion of American goods to Bangladesh and imported around USD 4.7 billion of Bangladeshi goods, including items like grains, seeds, soybeans, cotton, wheat, and corn. They have been importing machinery products, iron and steel products, apparel, textile products, footwear, and headgear too.

It has been stated on the American embassy's website that after the suspension of the country's Generalized System of Preference (GSP), the trade benefits have been lowered-but Bangladesh has made major progress regarding inspections, safety and security etc.

Although it seems that America holds the primary motive of maintaining its standard by not promoting those products where workers are not working under a minimum safety based environment for workers—pressurizing Bangladesh to retain its standard for global acceptance—there could be another hidden motive behind the decision to cut off trade privileges there.

Firstly, with the fear of Chinese influence in these spaces, what would appear here is that maintaining a distance would certainly benefit them. Or, taking it another way, leaving the space for China there could be the reason. The next crucial reason that probably got space during Obama's tenure was his perception towards South Asian space-which probably was not optimistic. Because this region was less hopeful, cutting off trade privileges was an important way to keep the distance there.

Being liked and loved in America has always been a challenge for a Muslim nation. However, the decision to terminate trade privileges may have been made because America discovered other better markets for similar quality — as India had been exporting similar types of goods to them as well, and at a lower price.It could also be that America went commercial, trying to practice fair trade, where the rules of economics—law and demand would play—rather than giving some special set of privileges there. The intention could be within them as this would not just bring American purchase pattern a relief, but bring fairness for the customers residing in America too – the fund separated for this purpose probably was used for some other purpose in different aspects or topic there itself.

America could be taking a decision on self-production at that time, but no one knows! However, the decision made at the time has not been revised and is still in effect. Although the two countries appear to be friendly from the outside, there could be some internal strife – which is also unknown. During Obama's leadership, America managed to renegotiate and strengthen free trade agreements with Korea, Colombia, and Panama with a strong set of labor provisions that improved benefits for workers and manufacturing industries. This policy was then characterized by moderate tax practice which increased on higher income too-designed for funding health care reformation, reduction of the federal budget deficit, and a decrease in income inequality. Hence, that could be a shifting procedure from Bangladesh to other nations too.

But, taking it positively, this decision could have been made to make Bangladesh independent and promote their competitiveness in the global market through their competitive strength rather than with outside help. Trade privileges were probably a fish for them, but leaving all the subsidies there, it would teach them the process to fish in the real world too. Ever since, Bangladesh has not stopped its trade in the globalized market — it has been able to retain the policy and strength anyway, and the trade turned out to be competitive in the South Asian market.

So, regardless of the policy, they all managed to cope with its trade, but America's core intention for restricting their trade privilege was certainly beyond the reason explained.