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President Obama, Bangladesh Has Faced Enough Tragedy, Don’t Take Away Jobs, Too

Posted By Ryan Olson On May 20, 2013 @ 6:00 pm In Economics | Comments Disabled

Sumon Yusuf/Polaris/Newscom [1]

Sumon Yusuf/Polaris/Newscom

Since late last year, workers in Bangladesh have been beset by tragedy after tragedy. First there was a factory fire that killed over 100 [2] garment workers in November. Then last month a garment complex collapsed, killing over 1,000 people [3].

Now, as if to add insult to injury, the Obama Administration is threatening to raise U.S. tariffs [4] on products that we buy from Bangladesh. In a proposed regulation [5], the U.S. Trade Representative, based on input from the AFL-CIO, is suggesting tariffs be increased on imported goods from Bangladesh to punish the country for its poor labor practices. Bangladesh currently enjoys duty-free tariffs [6] on some items under the General System of Preference (GSP), which grants tariff breaks to poor developing countries in order to encourage economic development.

This is bad policy. GSP imports from Bangladesh account for less than 1 percent [7] of all imports from Bangladesh. In addition, GSPs for Bangladesh cover mostly agricultural goods. This will hurt the country’s most vulnerable by limiting farmers’ access to U.S. to markets. Rural Bangladeshis earn 57 percent less [8] than their urban counterparts, and $10 per month less than the soon to be increased minimum wage of $38 per month.

Any tariff increases in general would be deleterious [9] to the Bangladeshi economy. Tariffs increase the cost of exporting, ultimately eliminating jobs. This would put the very workers U.S. lawmakers are trying to protect out of jobs and make needed regulatory improvements even less likely.

These tragedies are horrific, but let’s not add insult to injury by taking away jobs from Bangladesh’s most vulnerable.

 


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URL to article: http://blog.heritage.org/2013/05/20/president-obama-bangladesh-has-faced-enough-tragedy-dont-take-away-jobs-too/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/Bangladesh130506.jpg

[2] killed over 100: http://www.csmonitor.com/World/Latest-News-Wires/2012/1125/More-than-100-die-in-garment-factory-fire-the-deadliest-in-Bangladesh-s-history

[3] killing over 1,000 people: http://news.yahoo.com/bangladesh-collapse-search-over-death-toll-1-127-122554495.html

[4] is threatening to raise U.S. tariffs: http://www.washingtonpost.com/business/economy/us-may-strip-bangladesh-of-tariff-breaks/2013/05/16/12e7ea0e-be42-11e2-9b09-1638acc3942e_story.html

[5] proposed regulation: http://www.regulations.gov/#!docketDetail;D=USTR-2012-0036

[6] currently enjoys duty-free tariffs: http://www.regulations.gov/contentStreamer?objectId=09000064811b07a3&disposition=attachment&contentType=pdf

[7] account for less than 1 percent: http://www.braumillerschulz.com/ustr-seeks-comment-on-withdrawal-of-gsp-for-bangladesh/

[8] earn 57 percent less: http://www.bbs.gov.bd/WebTestApplication/userfiles/Image/HIES-10/Final%20All%20table.pdf

[9] would be deleterious: http://www.ti-bangladesh.org/index.php/press-release/815-tib-concerned-over-us-law-makers%E2%80%99-initiative-to-review-of-bangladesh%E2%80%99s-duty-free-access-calls-for-playing-their-own-role-in-ensuring-ethical-business

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