Will suspending trade privileges for Bangladesh improve local enforcement of working conditions ?

An article in the New York Times (June 28, 2013) describes the US administration’s plan to suspend trade privileges for Bangladesh because the country has permitted safety violations and not enforced labor rights, particularly for the apparel manufacturing industry. The recent fires and lack of building code enforcement have put pressure on retailers worldwide to take responsibility for their sources. Is suspending trade privileges, thus increasing the cost of goods imported from Bangladesh, increase the pressure on apparel manufacturers to further decrease their costs ? Or will it cause the government to increases local taxes on the industry to increase enforcement, thus creating the same effect on cost pressures ? Is the pressure on Bangladesh from its labor costs relative to other countries ? Would the supply chains be better off with a local non-profit that monitors compliance to expected standards ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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