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US suspends Bangladesh trade privileges

Lamia Begum joined relatives of workers killed at Rana Plaza in seeking compensation for their loss, months after the building collapsed in Bangladesh, killing 1,129 people.

ABIR ABDULLAH/EPA

Lamia Begum joined relatives of workers killed at Rana Plaza in seeking compensation for their loss, months after the building collapsed in Bangladesh, killing 1,129 people.

WASHINGTON — President Obama announced Thursday the suspension of US trade privileges for Bangladesh because of concerns about labor rights and worker safety that intensified after hundreds of people died in the global garment industry’s worst accident.

Obama said Bangladesh was not taking steps to afford internationally recognized worker rights to employees in the South Asian country.

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US Trade Representative Mike Froman said the United States will, however, start new discussions with Bangladesh on improving working conditions so the duty-free benefits that cover some 5,000 products can be restored. He did not say when that might be, noting it would depend on the actions of Bangladesh.

Thursday’s announcement was the culmination of a yearslong review of labor conditions in the impoverished country. Democratic lawmakers have been pushing for the step since the April 24 collapse of Rana Plaza in Dhaka, which killed 1,129 people. In November, a fire at a garment factory killed more than 100 people.

‘‘The recent tragedies that needlessly took the lives of over 1,200 Bangladeshi garment factory workers have served to highlight some of the serious shortcomings in worker rights and workplace safety standards in Bangladesh,’’ Froman said.

The Generalized System of Preferences, or GSP, which is designed to boost the economies of developing nations, covers less than 1 percent of Bangladesh’s nearly $5 billion in exports to the United States, its largest market. The benefits do not cover the lucrative garment sector, but Bangladesh’s government was anxious to keep them.

The action may not exact a major and immediate economic toll, but it carries a reputational cost and might deter American companies from investing in the country, one of the world’s poorest.

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The US action, which takes effect in 60 days, also may sway a decision by the European Union, which is considering withdrawing GSP privileges. EU action could have a much bigger economic impact because its duty-free privileges cover garments, which account for 60 percent of Bangladesh’s exports in that sector.

The US trade representative’s review of labor conditions in Bangladesh follows a petition filed in 2007 by the AFL-CIO seeking withdrawal of the GSP benefits. The review was expedited late last year amid concern from US lawmakers about deadly industrial accidents, deteriorating labor rights, and the April 2012 killing of prominent labor activist Aminul Islam — a case that has not been solved.

Froman said that despite close engagement with Bangladesh to encourage labor reforms, the United States had not seen sufficient progress. But he said the United States was ‘‘committed to working with the government of Bangladesh to take the actions necessary to rejoin the program.’’

Bangladesh maintains it is doing all it can by closing dangerous factories and moving to amend its labor law.

Calls from both House and Senate Democrats for US benefits to be curtailed had multiplied since the Rana Plaza deaths, and some of those lawmakers quickly welcomed Thurday’s decision.

Congressman Joe Crowley, a New York Democrat who is cochairman of the congressional caucus on Bangladesh, said that in light of recent tragedies in the country, the suspension was ‘‘inevitable.’’

‘‘I hope this action will propel Bangladeshi officials to develop a clear path forward that protects all workers in Bangladesh,’’ he said.

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