If you read this story you’ll understand about power. I’ll give you a brief summary: A group of major buyers from high street brands such as M&S, Hennes, Walmart, Tesco and Nike met with the head of the Bangladeshi Garment Manufacturers Association and pushed for Bangladesh to reduce the prices they’re offering to exporters.
The brands used the excuse that other countries such as India, Pakistan, China and Vietnam were all lowering prices and strongly suggested that Bangladesh do the same.
My question reading this was, what choice do Bangladeshi garment companies have? I’m constantly shocked at how trade negotiations aren’t actually negotiations. As the deficit is passed down the supply chain, price drops and the economic crisis inevitably end up hitting the workers at the bottom hardest, and they’re the people who can’t afford the loss.
The reality is that as people stop shopping and recession spending hits home, companies have got spooked and are grouping together to demand lower prices from countries who are already being driven to produce at very cheap rates. Playground bullying? – yes even in the big world.
The president of the Bangladeshi exporters association noted that trade with Europe and the States had shrunk by 10 % in January, and was worried. As that trade makes up 90% of the industry, this is bad news for workers who will face job cuts in the coming months. Not to mention the industry reverting to temporary contracts to cope with a fluctuating climate, or factories accepting large orders that they can’t really cope with because it sounds like good money.