Promoting labour rights in the global economy: Could the United States’ new model trade and investment frameworks advance international labour standards in Bangladesh?

• DOI: http://doi.org/10.1111/j.1564-913X.2015.00038.x
• Date: 01 September 2016
• Author: Ronald C. BROWN
• Published date: 01 September 2016

Copyright © The author 2016

Journal compilation © International Labour Organization 2016

International Labour Review, Vol. 155 (2016), No. 3

Promoting labour rights in the global economy:

Could the United States’ new model

trade and investment frameworks advance

international labour standards in Bangladesh?

Ronald C. BROWN*

Abstract. International free-trade or investment agreements offer great potential

for improving labour standards. But that potential is far from realized. Compared

with earlier models, the strengthened labour provisions of the United States’ re-

cent trade agreement with the Republic of Korea mark a denite improvement, but

the author questions their effectiveness, not least because the rights they purport to

protect are specically framed (somewhat loosely) in terms of the ILO Declaration

of 1998 rather than the fundamental Conventions that underpin it. Enforcement

mechanisms are also questionable. He considers what would need to be done to en-

sure that such agreements genuinely contribute to raising labour standards globally.

On 28 June 2013, amidst a cacophony of international and national out-

rage in the wake of the world’s biggest industrial accident since Bhopal,

United States President Barack Obama made an unprecedented announce-

ment. The United States, he declared, would no longer extend trade privileges

to Bangladesh, rebuking it for not adhering to international labour standards

and sending a strong message to US retailers operating there which had been

apathetic regarding labour conditions (Greenhouse, 2013a; White House, 2013;

see also Anner, Bair and Blasi, 2013).1

Just two months earlier, the eyes of the international community had

been xed on the heart of Dhaka, where the Rana Plaza building, housing the

garment factories of retailers based in the United States and other western

* Professor of Law, University of Hawai‘i Law School, email: ronaldc@hawaii.edu. The

author wishes to thank Scott Prange for his very able research assistance.

Responsibility for opinions expressed in signed articles rests solely with their authors, and

publication does not constitute an endorsement by the ILO.

1 President Obama announced that pursuant to section 502(d) of the 1974 Trade Act, it was

appropriate to suspend Bangladesh’s designation as a Generalized System of Preferences (GSP)

beneciary because it had not taken or was not taking steps to afford internationally recognized

rights to workers. In order to reect the suspension of Bangladesh’s status as a beneciary devel-

oping country under the GSP, the President determined that it was appropriate to modify general

notes 4(a) and 4(b)(i) of the Harmonized Tariff Schedule of the United States.

International Labour Review384

countries, had collapsed (Yardley, 2013a; see also Anner, Bair and Blasi, 201 3).

When it did, it simply crumbled, killing 1,129 men, women and their children

who had been in day care, while injuring another 2,515 (Harder, 2013; Yard-

ley, 2013a and 2 013b; Kabeer and Mahmud, 2004).

In the international race to the bottom, they were the most recent high-

prole casualties, this time in the garment industry, which has long proted

from disparities between the strict labour standards of the developed countries

and the considerably less stringent standards in the developing world. With

retailers actively shopping for countries where they could run factories on the

back of cheap labour, Bangladesh was able to develop an export economy by

luring them in with a surplus of socially and economically oppressed workers,

impoverished and desperate for work.

In many ways, the international race to the bottom that led to the Rana

Plaza disaster, had been propelled by favourable trade preferences for coun-

tries like Bangladesh under the GSP. Bangladesh was indeed one of 125 coun-

tries that enjoyed trade preferences with the United States and had been

allowed to export nearly 5,000 products duty-free to the United States (Of-

ce of the United States Trade Representative, 2013a), which had bought about

25 per cent of its US$18 billion in annual apparel exports (Greenhouse, 2013a).

United States retailers naturally ocked to Bangladesh, contracting with “subs”

like Mr Rana to run their factories and hire cheap labour, and easily import-

ing their goods without additional tariffs.

In revoking Bangladesh’s trade preferences, President Obama had

hoped to put economic pressure on the country to adopt and adhere to in-

ternational labour norms, while at the same time putting pressure on Ameri-

can retailers which were operating in the country by restricting their imports.

This bold move was largely symbolic, however. Within the context of a robust

bilateral relationship, which benets both countries economically, a compre-

hensive bilateral trade and investment agreement, requiring both countries

to adopt international labour standards, would undoubtedly have been more

effective to implement the type of lasting reforms that were needed.2 Per-

2 In the interim following the disaster, several “quick xes” were introduced. On President

Obama’s announcement, see “Statement by the U.S. Government on Labor Rights and Factory

Safety in Bangladesh” (“Statement”) at: http://www.state.gov/r/pa/prs/ps/2013/0 7/212209.htm. On

8 July 2013, the EU, Bangladesh and the ILO entered into an agreement for immediate reform,

under a compact committing the parties to a number of time-bound actions, including reforming

Bangladeshi labour law to strengthen workers’ rights, improving building and re safety by June 2014

and recruiting 200 additional inspectors by the end of 2013 (see “ILO, EU, Bangladesh government

adopt new compact on garment factory safety”, at: http://www.ilo.org/global/about-the-ilo/activities/

all/WCMS_217271/lang--en/index.htm). On 15 July 2013, Bangladesh amended its Labour Act 2006,

whose conformity with international labour standards ratied by Bangladesh was then reviewed by

the ILO’s supervisory machinery (see “ILO statement on reform of Bangladesh labour law”, at: http://

www.ilo.org/global/about-the-ilo/media-centre/statements-and-speeches/WCMS_218067/lang--en/

index.htm). But Human Rights Watch has a negative assessment (see “Bangladesh: Amended labor

law falls short”, at: http://www.hrw.org/news/2013/07/15/bangladesh-amended-labor-law-falls-short).

On 19 July 2013, the United States associated itself with the EU–ILO compact, and it also issued

a multi-step Bangladesh Action Plan 2013, listing needed reforms (see the above “Statement”; see

also Bolle, 2014) [all links accessed 16 August 2016].