Government preparing for EU’s GSP+ review in 2008

The government is taking action to retain the GSP+ scheme for Sri Lanka beyond 2008, says the Minister of International Trade.“The GSP+ comes up for review in 2008. We are already laying the foundation for the review,” said Minister of International Trade and Export Development, G L Peiris at a press conference after the launch of the MAS Fabric Park (MFP) in Thulhiriya last week.

The GSP+ scheme is a unilateral, preferential trade scheme from the EU that allows Sri Lanka to export around 7,200 items into the EU, duty free. Sri Lanka is the only country in South Asia to get this benefit. The GSP+ is given to countries that are seen as ‘vulnerable economies.’ But countries must also ratify and implement a number of international conventions on political, human and labour rights and environmental standards to qualify for the GSP+.

The GSP+ has been operational in Sri Lanka since July 2005 but is up for review in 2008. The outcome of the review decides whether Sri Lanka should keep the GSP+ beyond 2008.

So far the the scheme has helped increase exports to the EU and has been particularly useful for the local garment export industry. The garment industry that provides employment for nearly 300,000 people is using the GSP+ zero duty advantage to beat price competition and expand market share in the EU. This is compensating for losses in the US from increasing price competition from countries like China and India.

However, over the last two years a number of human rights violations allegations have been made against Sri Lanka. Earlier this year Belarus, a country qualifying for duty cuts under the EU’s general GSP scheme, was removed from the scheme due to labour rights violations. A statement from the European Commission on June 15 said that Belarus' GSP trade preferences were withdrawn from 21 June 2007, because it did not protect worker’s rights on freedom of association under International Labour Organisation obligations.

The GSP+, unlike the general GSP, is awarded on grounds of maintaining good human rights and labour standards. However, the government says it is already laying the ground work to face the GSP+ review, despite allegations of deteriorating human rights inthe country. This preparatory work includes ratifying other required international conventions relating to human rights and also holding talks with EU member governments.

“Last Wednesday, Parliament passed some important bills including the Covenant on Civil and Political rights. We are also talking to governments in the EU individually. We think the GSP+ is very important for rural livelihood security in Sri Lanka. That is why we certified these bills as urgent, so that they can be presented prior to the budget,” said Peiris.

So far only 15 countries get duty free access into the EU through the GSP+. These are the five Andean countries of Bolivia, Columbia, Ecuador, Peru and Venezuela, the six Central America countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama and Moldova, Georgia, Mongolia and Sri Lanka.