EU warns of trade action following Bangladesh fire

Wednesday 01 May 2013 23.16
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EU calls on the Bangladeshi authorities to act immediately to ensure that factories comply with international labour standards
EU calls on the Bangladeshi authorities to act immediately to ensure that factories comply with international labour standards
A Bangladeshi youth reacts after seeing his relatives dead body following the building collapse
A Bangladeshi youth reacts after seeing his relatives dead body following the building collapse
The eight-storey building collapsed in Savar, on the outskirts of Dhaka
The eight-storey building collapsed in Savar, on the outskirts of Dhaka

The European Union is considering trade action against Bangladesh to pressure Dhaka to improve safety standards after a building collapse killed hundreds of factory workers.

Bangladesh currently has preferential access to EU markets for its garments.

Duty-free access offered by Western countries and low wages have helped turn the country's garment exports into a $19 billion a year industry, with 60% of clothes going to Europe.

But any action by the EU would require the agreement of all member states and could take more than a year to implement.

"The European Union calls upon the Bangladeshi authorities to act immediately to ensure that factories across the country comply with international labour standards...," the 27-nation bloc said in a statement issued by EU foreign policy chief Catherine Ashton and Trade Commissioner Karel de Gucht.

The Swiss-based IndustriAll Global Union, which represents 50 million workers worldwide, has set a 15 May deadline to finalise with Western retailers a commitment to a fire and building safety plan for Bangladesh.

"Funds will be made available for inspections, training and upgrades of dangerous facilities," it said in a statement and called on retailers to renegotiate contracts.

The factory collapse was the third deadly incident in six months to raise questions about worker safety and labour conditions in the poor South Asian country.

Clothes made in five factories inside the Rana Plaza building were produced for retailers in Europe and Canada.

In the year to June 2012, Bangladesh's garment exports to the EU rose to €8.61bn from €7.97bn a year earlier, according to Bangladesh's commerce ministry.

The EU said it would look at Bangladesh's preferential trade access to the EU market in order to encourage better safety standards and labour conditions.

"The EU is presently considering appropriate action, including through the Generalised System of Preferences (GSP) - through which Bangladesh currently receives duty-free and quota-free access to the EU market under the 'Everything But Arms' scheme - in order to incentivise responsible management of supply chains involving developing countries," said the statement.

Ms Ashton and Mr de Gucht said they were deeply saddened by the "terrible loss of life", particularly because it followed a fire in the Tazreen Fashion factory in a Dhaka suburb in November that killed 112 people.