The United States has suspended tax-free trade privileges granted to Bangladesh over concerns about working conditions in the country's garment industry.
The decision follows the collapse of a factory complex in the Bangladeshi capital Dhaka in April, which left more than 1100 people dead.
The order by Washington suspends the Generalized System of Preferences (GSP), a programme which reduces quota restrictions on Bangladeshi exports to the United States.
The GSP scheme is aimed at promoting economic growth in developing countries.
However, US trade officials - who conducted a year-long review into safety standards and labour rights in Bangladesh - say that recent incidents "highlight the serious shortcomings in workplace safety standards in Bangladesh".
Whilst the suspension of the GSP scheme covers less than 1% of Bangladesh's $5 billion exports to the US, the move could have repercussions for the GSP programme in the European Union which accounts for 60% of Bangladeshi garment exports.
Garment sector officials and the foreign ministry in Dhaka condemned Washington's move saying the government had begun to take the necessary steps to improve safety at factories and labour rights.BLOG COMMENTS POWERED BY DISQUS