Reweaving the EU's Generalised Scheme of Preferences: Conditionality, enhanced engagement and reform in Bangladesh's ready-made garment industry

Bangladesh's ready-made garment (RMG) industry is characterised by labour rights violations, from trade union discrimination to harassment. These violations entered the global spotlight after the devastating 2013 Rana Plaza factory collapse. As a beneficiary of the EU's Generalised Scheme of Preferences (GSP) Everything But Arms arrangement for Least Developed Countries (LDC), the EU had the opportunity to withdraw tariff preferences for reasons of ‘serious and systematic’ violations of labour rights; this is negative conditionality. Instead, the EU pursued engagement through the Bangladesh Sustainability Compact, a multi-stakeholder, soft-law instrument. This was largely perceived as a positive measure. Bangladesh's graduation from LDC status in 2026 coincides with entry into force of the EU's new GSP in 2027. Bangladesh can retain more advantageous preferences by applying for GSP+, which includes the condition of ratifying and implementing international conventions on human rights, good governance and the environment. This is positive conditionality. This paper presents a case study of how both negative and positive conditionality have shaped workers’ rights in the RMG industry since Rana Plaza. The paper draws on interviews with stakeholders including employers and trade unions. It evaluates the effectiveness of the EU's strategy of enhanced engagement and reviews the EU's 2026 GSP Regulation.