GSP Program in Bangladesh Does Not Promote Sustainable Development

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Date of publication: June 26, 2013

Source: Press Release

Author: ILRF, ASH, CPATH, HRTCN

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As garment factory fires and building collapses continue to claim more lives in Bangladesh, the US government must change course and send a strong message that business as usual in Bangladesh must end. Removing GSP benefits for Bangladesh, a country that has repeatedly failed to address worker rights issues across several industries, will send that message.

Some concerns have been raised as to the monetary consequences of removing GSP benefits for Bangladesh. Notably, there is a concern that stripping Bangladesh of GSP will hurt industries that support workers, doing more harm than good. But a closer look at the benefits that the country receives under the GSP program reveals that the United States is supporting an industry that does not, in fact, support its workers.

In 2012, the tobacco sector was the largest beneficiary of Bangladesh’s GSP program, accounting for over $11 million in tobacco exports out of $35 million in total GSP exports. While the trade benefits under the GSP program may benefit the growing Bangladeshi tobacco industry in the short term, over the long term, the incentives that the GSP program provides have led to the rapid increase in tobacco production. This increased production creates a net negative impact on the health of US citizens and Bangladeshi citizens in the form of increased tobacco use, increased health care costs, and decreased government revenue that otherwise could be applied to tobacco prevention programs. It is widely known and accepted that tobacco is the cause of nearly 6 million deaths every year, and encouraging tobacco production through the GSP program can only make that number grow.

“There is a strong argument that neither Bangladesh nor the U.S. should be subsidizing trade in tobacco,” said Laurent Huber, director of Action on Smoking and Health. “Both have signed the Framework Convention on Tobacco Control, which Bangladesh has ratified, committing both countries to fighting the growing global tobacco epidemic.”

However, the damaging effects of tobacco are not limited to health concerns of consumers. In addition to the high costs of seeds and fertilizers which have made farmers dependent on tobacco companies through debt-bondage, tobacco is one of the most labor-intensive cash crops in the world. As farmers transition into tobacco production, family members are enlisted to assist with the high labor requirements. As a result, the tobacco crop is associated with child labor in Bangladesh and over thirty other tobacco growing developing countries. There are also numerous health risks associated with tobacco growing. Tobacco farmers and family members experience green tobacco sickness (nicotine poisoning through the skin), pesticide poisoning, and respiratory disease due to inhalation of dust from raw tobacco leaves.

Tobacco is a relatively minor crop in overall agriculture in Bangladesh, but its influence is rapidly growing. Between 2011 and 2012, tobacco exports under the GSP program have more than doubled, from $5 million to $11 million. Furthermore, tobacco as a share of overall exports has risen rapidly, from about 2.5 percent in 2000 to nearly 34 percent in 2009. These statistics represent a dangerous growth trend in a sector that is responsible for the death and impoverishment of hundreds of thousands of Bangladeshi and US citizens every year. The expansion of tobacco growing is made easier as the GSP program encourages production through the absence of tariffs.

Withdrawing GSP benefits for Bangladesh could substantially prevent or potentially eradicate tobacco-related child labor problems and workers’ rights violations. With the suspension of the GSP program in Bangladesh, newly applied tariffs can deter tobacco production and consumption. Tobacco is a unique product in international trade. When used exactly as intended, it kills, and it should therefore not be promoted.

Along with Action on Smoking and Health (ASH), the Human Rights and Tobacco Control Network, and the Center for Policy Analysis on Trade and Health (CPATH), the International Labor Rights Forum has called on the US Trade Representative to take these comments in consideration as the decision on GSP benefits for Bangladesh is finalized this week.