Instead of reducing tariffs on imports from Bangladesh, President Obama increased the tariff on certain products by suspending the “preferential” trade treatment given to Bangladesh and other developing countries. The change in tariffs does not apply to garments, however, which already face high U.S. tariffs.

The U.S. suspended its preferential trade treatment for Bangladesh on Thursday [June 27, 2013], a largely symbolic move to punish the country for poor labor practices that attracted worldwide attention after a garment factory collapsed in April, killing more than 1,100 workers.

President Barack Obama carved the South Asian country from a trade framework that eliminates certain U.S. import duties for select developing economies. The suspension, which will begin in about 60 days, is expected to raise U.S. import duties on some Bangladeshi goods, including golf equipment and ceramics, but would have little effect on the garment industry, which dominates the country’s international trade. The decision marks a victory for U.S. labor leaders, who have criticized the labor laws and worker safety in Bangladesh. AFL-CIO President Richard Trumka said the suspension “sends an important message to our trading partners.” Sen. Robert Menendez, chairman of the Senate Foreign Relations Committee, which held a hearing this month on labor issues in Bangladesh, hailed the move, saying, “We cannot and will not look the other way while workers are subjected to unsafe conditions.” …

Source: Excerpted from William Mauldin, “U.S. Suspends Bangladesh’s Preferential Trade Status,” The Wall Street Journal, June 27, 2013, p. A10. Reprinted with permission of The Wall Street Journal, Copyright © 2013 Dow Jones & Company, Inc. All Rights Reserved Worldwide.

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