GSP+ beneficiaries reduced to 85 countries from 173
The European Union (EU) delegation that visited Sri Lanka this week is examining whether the country is abiding by the 27 international conventions, three of which were in contravention when the trade concessions were withdrawn in 2010.
The delegation met local authorities and other key stakeholders to discuss Sri Lanka’s willingness to regain GSP + concessions that would allow exporters to trade with EU nations without tariffs.
On the sidelines of a meeting at the National Chamber of Commerce in Colombo, the EU Delegation Sri Lanka Head David Daly told the Business Times that the last time the trade concessions were withdrawn was because Sri Lanka had contravened three of the international conventions it was signatory to namely the International Convention on Civil and Political Rights, the International Convention Against Torture, and the International Convention on Rights of Children.
However, he noted all 27 conventions based on human rights, labour rights, environment protection and good governance would be looked into prior to granting the trade concessions to the country.
Mr. Daly asserted the new regime’s interest in establishing good governance in Sri Lanka and noted this was a crucial and first step to regaining GSP + concessions.
But while this was all “good for talk” it could be a “huge challenge” to transform those commitments to reality, he stated.
The EU mission head stated that one day Sri Lanka would have to graduate out of the GSP system which is for relatively poor countries. “One day Sri Lanka will be too rich for it,” he said.
EU- Sri Lanka trade being worked upon would be in the region of Euros 5-6 million, Mr. Daly said adding that policies and regulatory matters needed to be taken into account to establish the export strategies.
It was pointed out that in view of the fisheries issue, the EU delegation believes there should be work carried out first on the fishing aspects that needed to be resolved following which the GSP + could be readily obtained. Mr. Daly explained that it would be wise on Sri Lanka’s part to overcome the fisheries problem as this could be questioned in the EU Parliament when the matter concerning the granting of GSP + would be presented. In this respect, it would serve Sri Lanka well to have overcome the first issue, he noted.European Commission DG Trade Deputy Head Nikos Zaimis said they had reduced the number of beneficiaries of the GSP + concessions to 85 countries from the previous 173. In this respect the vulnerability criterion ensures that there will be an increase from 1 to 2 per cent share in all EU GSP imports that would help more countries to become eligible.
It was asserted that as part of the entry process to obtain GSP + the government needed to commit itself and implement the seven human rights conventions and eight labour rights of the ILO convention. While the EU does not expect a perfect record it was noted that there should be a “political commitment” and in effect the government has to provide a binding undertaking on the 27 international conventions, accept monitoring and reporting to the EU in addition to cooperate with EU monitoring, Mr. Zaimis explained.
EC DG Trade Andreas Julian also addressing businessmen said Sri Lanka had a trade surplus of over Euros 1 billion with a growth rate of 4.7 per cent recorded from 2009-2014.
Sri Lankan exports had performed better than during the GSP + period but there was a drop in preferential exports to the EU, he noted.
In addition, total exports of clothing continued to grow positively and also did better than during the GSP + period with preferential imports of clothing dropping.
Both total and preferential exports of fish and bicycles also decreased after the loss of GSP + while rubber products had no impact, it was noted.
The EU is Sri Lanka’s largest export market taking almost 26 per cent of Sri Lanka’s exports to the world.