Obama Administration Suspends Bangladesh GSP Eligibility, Announces New CNL Waivers
The Obama administration will suspend Generalized System of Preference benefits for Bangladesh for worker’s rights violations, effective Aug. 30, according to a presidential proclamation that has yet to be published in the Federal Register (here). The proclamation sets forth changes to the GSP resulting from the 2012 annual review, including new competitive need limitation (CNL) waivers and the withdrawal of GSP coverage for a corn product from Brazil and passenger tires from Indonesia. The proclamation also makes changes to the HTS related to the World Trade Organization’s Information Technology Agreement (ITA) and the U.S.-Colombia Trade Promotion Agreement (CTPA).
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A review of Bangladesh’s worker rights environment had been underway since 2007, said the U.S. Trade Representative. The interagency country practice review was requested by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). Under GSP, countries must meet statutory worker rights and intellectual property rights standards, among other things. Two incidents in the past year -- April’s devastating Rana Plaza factory collapse, which killed more than 1,000 people, and the Tazreen factory fire in November which killed more than 100 -- heightened scrutiny of the issue (see 13060714)
Despite a push for reforms, the U.S. government hasn’t seen enough progress to allow the country to maintain GSP eligibility, said U.S. Trade Representative Michael Froman (here). “The recent tragedies that needlessly took the lives of over 1,200 Bangladeshi garment factory workers have served to highlight some of the serious shortcomings in worker rights and workplace safety standards in Bangladesh,” said Froman.
“While taking this action today, the Administration is also initiating new discussions with the government of Bangladesh regarding steps to improve the worker rights environment in Bangladesh so that GSP benefits can be restored and tragedies like the Rana Plaza building collapse and Tazreen Fashion factory fire can be prevented,” Froman said.
Other Results Include New CNL Waivers, Review of Ecuador Eligibility
The president’s proclamation also included other changes to the GSP program stemming from the 2012 annual review, USTR said (here). The proclamation granted waivers of competitive need limitations (CNLs) for over 100 products from 14 countries, including both petitioned and de minimis waivers. It also withdrew eligibility for duty-free treatment under GSP for a corn product from Brazil and passenger tires from Indonesia. According to USTR, Brazil and Indonesia are sufficiently competitive and exceeded CNLs for the product. The changes to GSP eligibility for these products will become effective on July 1. The Administration deferred decisions on petitions to add three products -- cut roses, frozen broccoli, and certain preserved artichokes -- to duty-free treatment under GSP, USTR said.
USTR also accepted for review a country practice petition on Ecuador related to recognition and enforcement of arbitral awards, it said. The country’s eligibility for Andean Trade Preference Act (ATPA) is already under scrutiny because of a spat with Chevron over an award of damages related to pollution (see 12092604). USTR said several other country practice petitions accepted in previous years remain under review: Indonesia, Russia, Ukraine, and Uzbekistan regarding protection of IPR, and Fiji, Georgia, Iraq, Niger, the Philippines, and Uzbekistan regarding worker rights.
The annexes to the proclamation listing specific changes to GSP and other tariff provisions have not yet been published. Upon publication, International Trade Today will provide a comprehensive summary of the changes.