Options for enforcing labour standards: Lessons from Bangladesh And Cambodia

TLDR

Bangladesh and Cambodia, among the world’s lowest‑cost textile exporters, face mounting pressure to raise labor standards to maintain price competitiveness. The study uses survey, focus group, and inspection data to compare compliance trajectories with basic labor standards in the two countries. Bangladesh still suffers from extremely low wages and poor conditions, whereas Cambodia has seen compliance improve after a U.S. trade agreement that tied incentives to labor standards, indicating that trade‑linked schemes can enhance working conditions without harming export or job growth.

Abstract

Abstract This study examines labour standards enforcement and compliance in two Asian economies (Bangladesh and Cambodia) that have amongst the lowest labour costs in the world but are experiencing strong pressures to improve the price competitiveness of their textile and garment exports. Analysis of survey, focus group and inspection data indicate differing trajectories in compliance with basic labour standards. While extremely low wages and poor working conditions have persisted in Bangladesh, compliance has begun to improve in Cambodia following a trade agreement with the United States that linked positive trade incentives with labour standards enforcement. These contrasting experiences suggest that in less developed countries, governments consider trade‐linked schemes to achieve improvements in working conditions without hindering export growth or job growth. Copyright © 2008 John Wiley & Sons, Ltd.