The European Union has threatened suspension of trade privileges for Bangladesh if labor standards are not improved further. The suspension would mean that Bangladesh would have to pay 12.5 per cent duty for exports to the 28-nation bloc.
At present, the country enjoys zero-duty access under the EU's Everything But Arms (EBA) scheme.
Bangladesh will need to demonstrate that it is taking concrete and lasting measures to ensure that labor rights are respected.
Under GSP (Generalised System of Preferences) regulation, beneficiaries are required to respect international principles of human rights and labor rights in order to continue to benefit from this preferential trade regime with the EU.
The EU wants Bangladesh to address issues pertaining to freedom of association and collective bargaining. It has called for full freedom of association for workers in the export processing zones, and allowing workers' organisations to associate with their counterparts from outside the export processing zones.
In 2015, Bangladesh was by far the largest exporter to the EU under the EBA scheme. The country accounted for 65.7 per cent of the EBA exports.
Last fiscal year, Bangladesh's exports to the EU stood at 18.68 billion dollars , which is 54.57 per cent of total exports in the 12-month period.