Research Report

Submitted in Partial Fulfillment of the Requirement

Course

MBA 515: Legal and Ethical Issues in Business

“Bangladesh Scrambles to Meet US Deadline

onTrade Unions ”

Submitted by
Ahmed Sayed Jamal (0421035)

Submitted to
Dr. Tanvir A. Khan
School of Business
 Independent University, Bangladesh

ACKNOWLEDGEMENT

This is my humble attempt to present gratitude in preparing this

report. This project would not have been possible without the
dedication and contribution of a number of individuals.

First and foremost, I would like to express my gratitude to Mr. Dr.

Tanvir A. Khan for his support for the preparation of this report.
His eagerness helps me in every step of the way and encouraged
me to propel myself higher.

Than I want to show my gratefulness to Mr. Kazi Habibur Rahman

(Deputy General Manager, Western Fashion House) for his
continuous and cordial support during my research.

Finally, I thank to Independent University Bangladesh for

providing me such opportunities to work and gain experience in
the professional field.
 Executive summary

The purpose of trade union is to establish the right of the workers

in the organization. In the developed countries trade unions
create a favorable impact among the employees and the
organization. But unfortunately in our country we are unable to
establish a positive image of trade union.

Our trade union decision is not solely depend on our

policymakers. There is a huge impact on the preference of the
other countries in our trade union decision. USA is in a strong
favor of establishing trade union in our country. The two biggest
investors in our EPZ Japan and South Korea are against the
decision.

The international politics make it more difficult for our workers to

get their right.
Hypothesis of the research

“Our trade Union establishment decision is largely depend

on the Trading countries“

Methodology

Methods of Data Collection

The report is composed of both primary and secondary sources of

data.

Primary Data:
Primary data may be collected by the following two tools.

1. Direct Interview Method.

Primary data have been collected by informal interview with the
officers. Some information regarding my report objects has been
collected through discussion with different executives.

Secondary Data:

The secondary data have been collected from some journals. Also
some important information is collected form Internet for the
analysis.

Survey period

The survey is being conducted from March 10th to March 20th

2009.

Limitations:

Some barriers and limitations were faced while gathering

information.
These are as follows:

 Short period of time.

 Some important respondent may be missing during the

interview.
  Because of the limitation of information, some assumption
was made. So, there may be some mistake in the report.

Introduction

Export is a very important variable in the overall trade

balance of a country. Over a long period of time our
Government facing a trade deficit in the international
business. That’s why it’s becoming so important for the
Government to increase the amount of export.

Our international business is highly depending on some

countries. USA is one of them. Almost half of the total export
is accounting in USA. Other major investors in our EPZ’s are
Japan and South Korea. These countries not only contribute in
our total export also in the employment in our country. That’s
why our government has to take policy that serves the
interest of these countries.

Bangladesh and the USA have signed a GSP (generalized

system of preference) in the year 1991. This system helped
Bangladesh in garments exports. The initial period of this
contract was 10 years. After it ended in 2001 USA offer an
extension of the contract for another three years. But they
have imposed some condition. The condition impose
Bangladesh allows trade union. Otherwise it will no longer get
GSP facilities.

The policymakers in Bangladesh are looking for a devise ways

to make both USA and foreign investors happy. Foreign
investor’s threats are clearly make an impact on the
Government mind. As they are facilitate a huge employment
in the country.
Analysis of the Major Issues

There are some important factors to think regarding these

issues. Establishment of trade union is becoming more a
political issue rather than providing employee rights. There
are some hidden factors that need to be analyzed to
understand the depth of these issues.

Why Government are in dilemma in Establishing Trade

Union

Our export is largely depending on the trade with some

specific countries. As mention earlier USA, Japan and South
Korea are the major countries. But there is a significant
difference in the preference regarding trade union among
these countries.

USA is the larger buyer of Bangladeshi product. 44 percent of

the total export is traded on USA. That’s why it become very
difficult for our policy makers to take a decision that hurt
their interest. On the other hand Japan and South Korea is the
major investor in our country. Two of the major EPZ’s in our
country are running with the help of these investors. In every
year they are creating more than 10,000 employments in our
country. Reduction in the unemployment rate is a huge factor
in the overall performance of the economy.

USA is in strong favor of establishing trade union in our

country. US have threatened to cancel trade concessions to
Bangladesh if it doesn’t allow workers to form labor unions.
On the other hand Japan and South Korea are not in favor of
forming trade union in Bangladesh. Restrictions on trade
union are one of the many incentives investors enjoy at the
EPZs.

Different opinion of the major trade countries make it difficult

for the policymakers of Bangladesh to bring a solution of
these problems.

Cost Benefit Analysis in Establishing Trade union

USA threatened to cancel the GSP if our Government does
not allow the workers to establish trade union. GSP
contributes a small portion of the total export. Under GSP
Bangladesh export to the US fetch some US $40 million
annually. But export from the US $ 1.2 billion that’s one fifth
of the countries total exports. From monitory value GSP has a
lower economic value compare to the other factors.

On the other side Japan and South Korea is the major investor
in Bangladeshi EPZ. Every year they have contributed in the
employment of more than 10000 workers. Employment
opportunity is a huge factor in poor country like Bangladesh.

Our Government fined it difficult to establish trade union for

the survival of GSP. It will create dissatisfaction among the
major investors.

Other issues in Establishment of Trade union

 Past experience
Bangladesh has a very forgettable experience regarding
trade union issues in the past. Several hundred state
owned enterprises have closed after incurring billions of
dollar losses while others are awash in red ink. Militant
trade unionism and theft by union leaders are mostly
responsible for the failure of trade union in Bangladesh.
 Some of the leaders earn so much money during the
period.

 Many workers are not in favor of Trade Union

Not only Government is feel hesitate to establish trade

union. Many workers are not in favor of Trade Union.
From the past experience they were not receiving any
significant benefit from trade union. Instead of
establishing trade union they just wanted to work in
peace.

 Lack of expertise of Government in handling trade

union issues

Many experts reported Bangladesh trade unions are far

from the stage where they can set ideals for any
organizations. Also when problem arises in the past
Government was unable to solve it in a proper way. Most
of the time trade union issues become a political debate
at the end. Government requires a running program with
trainers from the International Labor Organization (ILO)
to train workers on how to operate a modern trade
union. It’s a costly and time consuming approach.

Hidden factors that affects our policy

 Cold war between USA and Japan

 USA and Japan are the two major economic forces in the
world. There always has been a cold war between these
two countries. All around the world the economic
decision of these countries are not supportive to each
other. Our scenario is not an exception.

 Highly political influence

Trade union is an independent association that formed to
establish workers right. But in our case the definition of
trade union is little bit different. There is a highly political
influence in our trade unions. That reduces the
effectiveness of this organization.

 Lack of Economic strength

The bottom line is we can not take any strong decision
regarding trade union because of our Lack of Economic
strength. Our economy is highly depending on the
activity of some other countries. Most of the time we
have to take decision in favor of their interest.

Recommendation
Trade union is an integral part in the establishment of
workers right. In many countries workers have been benefited
from trade union. Our Government also needs to take proper
steps in the establishment of trade union. Governments can
take the following steps.

➢ Strong international trade policy

Government need to establish a strong international

trade policy that helps us in the reduction of the
dominance of other country. In such case Government
might take the decisions that serve the interest of our
own people.

➢ Reduce dependency on specific countries

Our international trade should not be dependent on

some specific country like USA, Japan or South Korea.
Government should try to make relationship with other
countries so we can make our trade in a diverse way. In
that case investor or buying countries might not able to
impose their choices in our policies.

➢ Government should handle the trade union issues

more efficiently

In the past our Government was unable to handle the

trade union issues successfully. Most of the time it
became a political issue.Government need to handle
these issues more carefully and efficiently. Any one
should not take advantage of this issues.
Conclusion

Trade Union is an important issue in establishing worker

rights and improves the working condition. But in our country
prospective it becomes a completely different issue. Our
workers are still far away to get the rights. Most of the
workers are not even receiving basic rights. Still we can not
say trade union is the solution to overcome from the
situation.