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Thu June 27, 2013
U.S. Punishes the Wrong Bangladeshi Export: Golf Clubs
Originally published on Fri June 28, 2013 11:30 am
The White House announced today that it was revoking special trade status for Bangladesh, a move apparently meant to send a message to the Bangladeshi government after April's horrific garment factory collapse. Small problem. The move by the White House in no way affects the garment industry.
Oh sure, a few items from Bangladesh that used to come into the country duty-free will have a new tax slapped on them. Tobacco, ceramic mugs, and golf club parts were all removed from a list called the GSP, the Generalized System of Preferences — basically, a list of stuff we allow into the country tax-free free from countries we want to help out. But t-shirts from Bangladesh were never on that list in the first place. They always had a tax slapped on them. A hefty one.
T-shirts and many other types of clothing are subject to some of the highest import duties around. The U.S garment industry makes sure those duties stay in place. They don't want to be undercut by Bangladesh's low prices.
So how does taxing a golf club help the garment workers in Bangladeshi sweatshops? Perhaps indirectly. Scott Nova, with the Worker Rights Consortium, hopes this action will send a strong message to Bangladesh's government to improve labor conditions. He says this is a "massive embarrassment" to the country, because it's rare for countries to get their special trade status pulled.
The embarrassment won't last very long though. This special tax-free list that Bangladesh got kicked off of, the GSP, is about to expire anyway later this summer. It ends every few years, and it is usually renewed by Congress, but not always immediately. If the GSP does get renewed, it's unclear whether Bangladeshi tobacco, mugs and golf club parts will make it back on the list of duty-free stuff.