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U.S.: Bangladesh Loses Favored Trade Status

Washington — The Obama administration announced yesterday that it will suspend Bangladesh’s preferential trade status after the collapse of a clothing factory there in which more than 1,100 workers died.

Union representatives and members of Congress said the U.S. was sending an important message about worker safety to the Bangladeshi government. But the effect is likely to be negligible on that country’s $19 billion export-driven apparel industry, which is characterized by low wages and abysmal working conditions for its 4 million workers, 80 percent of whom are women.

Of the nearly $5 billion in exports to the United States, only $35 million are exempt from duties under the U.S. Generalized System of Preferences. Apparel and shoes, which are Bangladesh’s primary exports to the U.S., do not receive duty-free benefits, said Edward Gresser, a trade analyst at GlobalWorks, a Washington research foundation.

“In terms of the actual amount of trade it affects, it’s actually quite small. And for better or worse, it’s not in the industry that has aroused the concern,” Gresser said. He noted that the $2 million that Bangladeshi exporters had saved under the preferences would be hardly noticeable in the $4.4 billion in apparel exports to the United States.