Politico - 17 January 2022
Fears UK-India trade deal could undermine sweatshops fight
By Emilio Casalicchio
Britain wants to get rich off new trade deals — but it risks making already-vulnerable nations poorer.
A UK agreement with India, the negotiations for which begin this week, could worsen conditions in the clothing sweatshops of South Asian neighbors, according to labor rights campaigners and a major industry group.
They’re pushing for social and environmental protections in any deal with India to avoid a race to the bottom.
Their fears center on the special arrangements London already has with developing nations known as the “generalized scheme of preferences” (GSP). This offers countries low or zero tariffs to help them cultivate business and ease domestic deprivation.
Pakistan, a major exporter of clothing, is categorized as an “enhanced framework” nation, designating it as a low or middle-income country. To be eligible for zero tariffs it has to sign up to certain rules on human and labor rights.
Bangladesh, another clothing powerhouse, is categorized as a “least developed nation,” meaning it automatically gets zero tariffs and quotas on all imports to Britain except on weapons. Bangladesh is soon expected to reach the same class as Pakistan.
But campaigners worry that if India, an economic giant compared with its smaller South Asian nations, does a deal with the U.K. which allows it also to get zero tariffs on finished clothes, it could dominate the market at the expense of its developing neighbors — putting livelihoods and rights at risk.
The concerns have found an unexpected champion: the business group representing the U.K. fashion sector. Members looking for “the cheapest needle” around the world might not agree, but the U.K. Fashion and Textile Association argues it has to fight for the good of the entire clothing ecosystem.
“We see that there’s a possibility to bring in more goods,” said Paul Alger, director of international affairs at UKFT. “But we’re not calling for zero tariffs on finished products, because that would undermine our position with some of the developing nations.”
To prevent such losses, UKFT wants tariffs on finished garments to remain above zero, so that India doesn’t get a competitive edge over nations that need the business even more. But India will no doubt put pressure on Britain to cut the tariffs to zero, in which case the sector is calling for India to meet at least the same standards as its developing neighbors.
“India is now a developed rather than a developing nation,” said Alger. “If the government finds that it does have to accept zero tariffs as part of a trade deal, then we would very much like to see social and environmental protections in the agreement that reflect similar obligations to the ones we make of Pakistan and Bangladesh and others as part of GSP agreements.”
The trade department said ministers are committed to tackling the issue of forced labor in global supply chains, and would encourage other nations to respect international labor standards.
A U.K. government spokesperson said: “The government is clear that more trade will not come at the expense of human rights. The U.K. will continue to show global leadership in encouraging all states to uphold international human rights obligations and hold those who violate human rights to account. In line with our international obligations, the government will continue to ensure a high level of protection of labor standards in new trade agreements.”
Loss in trade
Fiona Gooch, a senior policy adviser at campaign group Traidcraft Exchange, said the U.K. has “large and well-resourced retailers and manufacturing businesses that scan the world for the cheapest points of production. You also have governments that woo those businesses.”
The upshot is that retailers will move their manufacturing to India if it means they can sell products at a lower price, regardless of the implications for developing nations. That increased competition means downward pressure on prices, and the penny-pinching often hits terms and conditions for workers — be it on pay, benefits or corners cut on health and safety.
It’s a fear all too real for those working in the sweatshops of poorer nations. “If buyers increase their purchases towards India then the country’s garment workers may face loss of life and livelihood,” said Towhidur Rahman, president of the Bangladesh Apparels Workers Federation, a labor union.
He noted that up to 80 percent of factory workers in Bangladesh are women, most of whom come from villages and get no living wage and little in the way of trade union rights. So a loss of trade could be devastating for rural communities.
“If buyers turn to India, the current pace of the garment industry will slow down, which in turn will contribute to the creation of a large number of unemployed workers,” he warned. “The empowerment of women workers will be disrupted and various problems including social unrest may arise.”
Campaigners are also calling for the government to pass laws to ensure producers have an obligation to prevent human rights abuses in their manufacturing chains, and to set up a fashion watchdog to enforce fair purchasing.
Others argue the U.K. needs to write enforceable provisions into a trade deal with India on protecting human rights and labor rights in the region. But they hold out little hope Britain will push for commitments they believed are needed.
“Unless the U.K. does something radically different compared with its usual approach to trade, it won’t put anything binding in there on human rights or labor rights,” said Ruth Bergan from the Trade Justice Movement campaign group. “So India, a huge competitor on Pakistan and Bangladesh’s doorstep will get better access to the U.K. market without the same constraints.”