Govt. gearing to defend GSP+

By Dilshani Samaraweera

The GSP+ is coming up for review mid this year with the government mustering all its resources to make sure the GSP+ continues for another three years even as the west shows growing concern over human rights violations and civilian casualties of war.

The GSP+ is a unilateral trade concession scheme from the European Union to Sri Lanka. It allows Sri Lanka to export around 7,200 items to the EU, duty free.

Its most outstanding benefit however, has been to the local garment industry. Despite a slow takeoff since its original introduction in mid 2005, when no one knew what it was, the GSP+ scheme has become a hot favourite with the local garment export industry. In 2007 the GSP+ was given most of the credit for the impressive 22% growth in exports of clothing to the EU.
Last week President Mahinda Rajapaksa appointed a 4-member ministerial team to defend the GSP+ comprising Minister of Export Promotion and International Trade, G. L. Peiris, Minister of Enterprise Development and Investment Promotion, Sarath Amunugama, Minister of Foreign Affairs Rohitha Bogollagama and Minister of Disaster Management and Human Rights Mahinda Samarasinghe.

However, it was pointed out that while the government is taking damage control measures on one end, it may also be doing more damages on another end. While the government prepares its political defences on one end by appointing as many as four politicians to defend the GSP+ from the political front, it is dismantling specialised technical support from the other end.
Sri Lanka’s trade representatives in Brussels, that have the specialised skills required to negotiate on complex trade matters, are being recalled. Ambassador K.J. Weerasinghe, who is also a trade specialist, and the Trade Officer at the Brussels office, have both been recalled.

The Trade Officer will return to Sri Lanka from end of January and the Ambassador, from March 31, leaving the trade end of trade negotiations unmanned.

There is also concern that the GSP+ may not be continued after the 2008 review because of the increasing allegations of human rights violations in Sri Lanka. The GSP+ was given to Sri Lanka as a reward for impressive labour, environmental and human righs standards, for a developing country. So, according to industry analysts, the worry is that the increasing publicity on human rights violations could convince the EU to stop extending the GSP+ for Sri Lanka.

Some analysts said that if the EU decides not to extend the GSP+ the loss would be felt across the economy – particularly as the US economy, the next biggest buyer of Sri Lankan goods, is showing signs of slowing.

Three of the four ministers appointed to defend the GSP+ were out of the island and could not be reached for comment. The remaining minister was at meetings and could not come to the phone.

Defenders of the GSP+
The Department of Commerce however, said it had been preparing for the GSP+ review since last year. “We have not yet been officially notified of the review dates of the GSP+. But we have been getting ready for the GSP+ review since last year,” said Director General of Commerce, Manel de Silva.

The European Commission (EC) office here said the GSP+ review is scheduled for the second half of 2008. “The entire GSP scheme is reviewed every three years. It is scheduled for the second half of this year,” said its Trade Advisor in Colombo, Roshan Lyman.

Meanwhile, the GSP+ has also found some unlikely defenders in the local trade unions. Trade unions that said employers and government violated core labour conventions and therefore should not be blessed with the GSP+, now say the workers would suffer if the GSP+ were ended.

“They don’t comply by the labour standards but if Sri Lanka loses the GSP+ the impact will be on the workers. So we do not want to see the GSP+ being taken away. But we want some indication that core labour standards will be adhered to,” said Anton Marcus, General Secretary of the Free Trade Zones and General Services Employees’ Union.

Kohona rejects HR claims

Foreign Secretary Palitha Kohona said dates for the GSP+ review would be fixed within the year.

“The GSP+ review is due this year. The dates for the review would be fixed on mutual convenience. There would be an exchange of calls and letters and both sides would agree on a convenient date,” he said, explaining the government position to The Sunday Times FT.

On the possibility of the GSP+ not being continued after 2008 because of allegations of human rights violations, he said; “That is a very superficial argument because there is no country in the world where all these standards (human rights, labour, etc) are implemented meticulously. Not even the European countries have implemented these standards to the dot.” Kohona went on to explain that violations of international standards have occurred in Europe and have been reported to the Human Rights Committee in Geneva (now defunct) and the European Council of Human Rights.

Therefore, said Kohona, to expect Sri Lanka to implement all ratified international standards to the letter, would be unreasonable. On the change of staff at the Brussels office, Kohonna said;

“One person is ending his term and is coming back. The other is being replaced by a career diplomat. So, consistent with the practice in all countries, when there is a need for trade expertise, we will send a trade expert to Brussels from Colombo.”

Kohona said that the government decision to appoint a career diplomat to Brussels was on the basis of changes in the larger political landscape in Europe.

“Yes, trade with Europe is very important. Europe has in fact eclipsed the US as Sri Lanka’s major trading partner. But Brussels is also becoming an increasingly sensitive political posting.

The European Parliament is acquiring an increasing stature and even on foreign policy matters Brussels is gaining stature.

So many things are increasingly becoming centralised in Brussels (compared to individual European countries). That is why it was decided to post a career diplomat in Brussels,” explained Kohona.

To retain the GSP+ with Sri Lanka, the government would argue that it is the best interest of European liberal policy to continue the GSP+. “The GSP+ concessions were given to Sri Lanka following the tsunami. The major objective was to facilitate speedy recovery. So our argument is that the GSP+ has achieved this objective and has benefited Sri Lanka enormously, and not just by benefiting big businesses but also small businesses and workers. If you go into European supermarkets today you will find many items from Sri Lanka that were not there a few years ago. Much of this can be attributed to the GSP+,” said Kohona.

“We will try to convince the Europeans that the benefits extended have achieved their objectives and therefore, it is in the interest of European liberal policy to continue the GSP+ for Sri Lanka,” said Kohona.