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Orders
dry up in March after EU GSP Plus postponed Now it is uncertain whether Sri Lanka would get this concession even in July, as originally planned, due to many issues including the country not conforming to a European Union Road Map, according to trade union sources. Worried about the crisis, a government delegation led by Trade and Commerce Minister Jeyaraj Fernandopulle is expected to fly to Europe in early May to persuade the European Commission to hasten the process. The April postponement led to international buyers shifting their buying to other markets, leaving many factories here in the lurch. "Orders were coming in on the basis that we would be getting these concessions in April and when this was postponed, the buyers moved elsewhere," noted industrialist Nihal Seneviratne, also president of one of the garment chambers. The EU GSP (Generalised System of Preferences) special facility was originally planned for July this year but advanced to April as a concession especially to Sri Lanka in view of the economic impact of the tsunami. However all countries eligible to the facility would have benefited. Tuly Cooray, Secretary General of the Joint Apparel Association Forum (JAAF), said the industry was in disarray over the postponement which apparently followed disagreement amongst EU nations over the threshold level. Countries like India have complained over reducing the level - that is the point at which countries are eligible to the concession. Under current rules, any country accounting for more than 10-12 percent (or around that figure) of imports in the EU is not eligible to these duty free concessions. India is worried that EU members like France and Italy are canvassing for a reduction of this percentage to below 10 percent which would then affect India. Sri Lanka would however continue to benefit as its percentage share of EU imports is low. Industry sources said another reason for the postponement was the inability of Sri Lanka to keep to the Road Map set out by the EU if the country is to benefit from this facility. Among the issues on the road map are to strengthen Freedom of Association and the right to collective bargaining in Sri Lanka with special emphasis on progress achieved in practice in the Free Trade Zones, the modification of legislation on forced labour, the elimination of all forms of child labour and putting into practice various human rights conventions that have been ratified. "We can't match China's aggression in the market. Our only hope is to maintain current levels," noted JAAF's Cooray who said the China factor was also a dominant problem in the Sri Lankan context. A current EU GSP facility continues till next February but the one in April and now hopefully in July would have provided Sri Lanka just the impetus it needs to recover from the end-of-quota regime. International NGOs involved in issues relating to freedom of expression, trade union rights and child labour, said Sri Lanka could have easily benefited from the zero duty concession if the government had conformed to the Road Map which also sets out compliance in relation to 27 international conventions on labour, human rights and environmental issues. "The country has not progressed far on any of these issues," one activist said, adding that the Justice Ministry had failed to recognize decisions in three cases before the UN Geneva Human Rights Commission. The commission had ruled in favour of a complaint made by Ravaya Editor Victor Ivan and overturned a life imprisonment verdict on a suspected LTTE member. The third case related to a missing person. "One of the problems in Sri Lanka is that the EU trade rules are based on several issues relating to foreign affairs, justice and trade. Here the ministers concerned - like Justice for example - is unaware that Sri Lanka can lose out on a trade benefit if the UN Commission decisions are not implemented," he said. |
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