GSP+ benefits for just 7 years!
After all the ha-ho over GSP+, it appears that Sri Lanka would now enjoy these concessions – that is if the European Union (EU) approves Sri Lanka’s application – for a maximum seven years. This is on the basis that Sri Lanka is set to reach upper middle income country status by end 2016 and GSP+ benefits don’t apply to this category of countries. According to Joint Apparel Association Forum (JAAF) General Secretary Tuly Cooray, if Sri Lanka reaches the upper middle income country status and maintains this status for three consecutive years the country will only be given one more year by the EU before these trade concessions would be withdrawn,
According to previous official predictions, Sri Lanka is set to reach the US$4000 per capita income level by end 2016. Official said that once Sri Lanka is capable of maintaining the required per capita income level the EU would then give one more year for local industries to adjust before withdrawing these trade benefits. Other officials said according to World Bank calculations the categorisation of Sri Lanka in upper middle income country category (even if it happens this year) would take place in a few years (2-3 years). This would mean that Sri Lanka could enjoy the trade concessions for just seven years if GSP+ could be re-gained this year.
Asian Development Bank (ADB) President Takehiko Nakao has stated that the ADB was “re-orienting its operations to meet the evolving needs of Sri Lanka as it moves to become an upper middle income country in the next few years.” Mr. Cooray noted that Sri Lanka in 2014 was said to have been in the range of $3725 in terms of per capita income based on the normal growth rate at the time. He said that “seven years is a good enough time period” for the apparel industry to make gains if and when Sri Lanka goes up the ladder in the per income status.
Sri Lanka has enjoyed the EU trade benefits of GSP plus since 2005 and lost it in June 2010 after the country came under the hammer from the EU bloc for violating human rights among other issues. Currently, the government is working with the relevant authorities in the EU to ensure the ban on fish exports is lifted which is a pre-requisite to obtain the GSP+ trade concessions for the country’s industries. The recent Presidential visit to Germany and Austria were also aimed at obtaining their support for Sri Lanka when the vote comes up for the country to get the trade concessions. Sri Lanka is gearing to submit its application to obtain the trade concessions which auth