How Bangladesh will be affected by new US labor policy?

Farhad Chowdhury: Recently, a letter sent to the Ministry of Commerce from the Bangladesh Mission in the United States came up for discussion. The letter warned the government of possible US sanctions on labor issues and said that Bangladesh could be one of the targets of this labor policy. How much concern has the United States’ new policy on labor rights become for Bangladesh?
In November, the United States announced its new labor rights policy during a week-long labor movement in Bangladesh demanding higher wages. Sanctions, including trade embargoes, were announced around the world against those who would take away workers’ rights, intimidate and attack workers. Many analysts fear that such a declaration has room for added concern for Bangladesh given the political and economic situation.
It has become clearer through a letter signed by Minister of Embassy Salim Raza from the Bangladesh Mission in the United States. A significant aspect of that letter, widely discussed in the media of Bangladesh, was the political context. It is said that considering the political context, the US has reason to be concerned about this policy for Bangladesh and the US may try to use it for political purposes.
What said in labor rights policy?
US President Joe Biden signed a memorandum on November 16. The White House hailed the move as a historic move. Although that policy applies to all countries, when Foreign Minister Anthony Blinken detailed it, the Bangladesh context came up.

“We will hold accountable those who threaten, intimidate, attack union leaders, labor rights defenders or labor organizations,” he said. All the things like sanctions, trade penalties, visa bans will be used. We want to be with people like Kalpana Akhtar. Kalpana Akter is a Bangladeshi garment worker and garment worker rights activist. He said that he is alive because the US Embassy acted on his behalf.’
The White House statement
Use diplomacy, economic participation and foreign aid to protect internationally recognized labor rights, empower workers and ensure the right to organize.
Promptly and effectively address and prevent threats, intimidation and violence against trade union leaders, labor rights activists and trade unions.
Strengthening the capacity of federal departments and agencies to manage the global labor agenda.
Working with and forming alliances with multinational organizations to promote global labor standards, labor organization and internationally recognized labor rights.
Enhance trade and other means to promote internationally recognized labor rights
Concerned about political reasons?
Bangladeshi businessmen have a mixed reaction to this new US labor policy. Some think that there is not much concern about that policy as most of the international laws in the garment sector are implemented in factories in Bangladesh. According to many traders, there are still many irregularities or discontent in the labor sector, which can become a cause for concern.
There is already a lot of tension between the government of Bangladesh and the United States on issues such as elections and politics. Many are saying that the issue of labor rights is creating a place of risk. They fear that this labor policy can also be used for political purposes. According to CPD research director Khandaker Gholam Moazzem, as the political situation is intertwined with this labor issue, “political issues will also need to be taken seriously by the government.”
Arshad Jamal Dipu, a director and former president of garment owners and exporters’ association BGMEA, also feels there is cause for concern in the political context. In particular, as Secretary Blinken mentioned the name of Bangladeshi garment worker leader Kalpana Akhtar as an example, he called it quite alarming, saying, “We are not taking this lightly.”
Jamal feels that “there is a political combination here” as there is no precedent for taking an example of Bangladesh in the presidential memorandum. Many analysts think that Bangladesh government needs to look at this matter seriously.
As Moazzem put it, “How the government addresses the political areas, particularly the areas of electoral uncertainty and instability, may depend to a large extent on the extent to which Labor policies are applied to us.”
Both of them felt that the government should take steps to avoid any situation like trade embargo.
Export industry
The largest market for Bangladesh’s exports is the United States. According to the Export Development Bureau, 20 percent of Bangladesh’s exports in the fiscal year 2021-22 were destined for America. From July to October of the current financial year 2023-24, the exports to the United States were more than $2865 million which was 16.42 percent of the total exports. However, compared to 3073.9 million dollars in the same period of the last financial year, this time it was 6.79 percent less.
The announcement of such a policy from a top export market country has raised concerns about its impact on Bangladesh. As Arshad Jamal Deepu, a director and former president of BGMEA, said, “It is a big concern because the US is our number one market.” Research director of CPD, Khandaker Golam Moazzem also thinks that there are many challenges in the garment industry compared to before.
Referring to labor rights, trade unionization of workers, being harassed in various ways due to workers going to the streets with their demands, mentioning the various challenges surrounding the garment industry, he said, “Apart from this, labor rights in other sectors are under more challenges, there are weaknesses.”
In that case, highlighting all the weaknesses such as wages, factory working environment, labor-safety, workers’ right to organize, he expressed fear that “overall, if our export-oriented sectors fall under trade restrictions, then we have less strength to carry it in the current economic situation.”
This US policy has caused concern among traders in other sectors besides garments. As Bangladesh Textile Mills Association (BTMEA) Vice President Md. Fazlul Haque said, “We are worried that if any ban is imposed on us, it will become more difficult to run our business.”
Referring to America as a ‘food donor’ in the context of exports, he said, “If we don’t listen to them, go out of our way, then they can impose such restrictions.”
However, Shahidullah Azim, vice president of BGMEA, does not see such a reason for such fear. Claiming that all rules and regulations of the International Labor Organization (ILO) and the Labor Law are followed in Bangladesh, he thinks there is no reason to ban.
A garment owner of Chittagong and former vice-president of BGMEA SM Abu Taiyab gave a similar opinion. Claiming that the factory is run according to the demands and regulations of international buyers, he also does not think there is any fear of the ban. Although the salary of garment workers has been increased recently, it has not been reflected as much as the workers want. There are complaints among workers about the cost of living, and owners trying to maintain a competitive market for low-cost exports.

In such a situation, if any action like the US ban comes, many factories may close down as a result. Mr. Azim believes that the working class of Bangladesh will be the most affected. “I think they (America) will at least look at the workers and think about not giving sanctions,” he said.
The Preferential Market Facility or GSP facility was abolished in the US market in 2013 after the Rana Plaza accident. After that, most of the conditions for the development of the labor environment were met, but the GSP facility was not opened for Bangladesh.
Research director of CPD, Khandaker Golam Moazzem, thinks that in the current situation around the elections, when there is a fear that individuals, institutions or sectors may fall under the influence of US policies, the issue of this new labor policy needs to be looked at with special importance.
He also advises the government to take necessary steps by discussing it in the country and outside the country. Analysts feel that there is no opportunity to take the whole matter lightly, especially in the economic situation of Bangladesh and the reserve crisis.