Reinstating GSP Plus:

‘Lanka needs to improve human and labour rights record’

The European Union delegation which began discussions on reinstating the GSP Plus trade concessions to Sri Lanka has called upon the government to turn commitment to reality in adhering to the United Nations conventions.

“We want Sri Lanka to improve its record on human and labour rights, good governance and environmental concerns to be eligible for the new GSP Plus trade concessions,” EU Ambassador to Sri Lanka, David Daly told a media briefing last week.

In 2010, the EU withdrew the preferential trade concession granted to Sri Lanka due to its failure to implement UN conventions.

The former regime dismissed charges that it failed to comply with the eligibility criteria. Sri Lanka's poor human rights and governance record were the main reason for the removal of the trade concessions. Beneficiary States are mandated to comply with the 27 UN conventions on human rights, good governance, environmental protection and labour rights.

Around 170 countries benefited from the former GSP Plus scheme.

The number of beneficiaries under the new scheme will be reduced to around 85 based on the income index of the World Bank.

“Sri Lanka will get rich and graduate out of the GSP Plus scheme by reaching the status of an upper income country.

It is like walking away from the hospital”, Daly said.He said that the EU is not happy with the human rights and good governance record of Sri Lanka so far.

The Union was prepared to work together on a process with the hope that the new government was keen to make positive changes. “At this stage the EU does not consider that everything in Sri Lanka is right.

There is much more to be done for Sri Lanka to be eligible for the new scheme,” Daly said.

With regard to the ban on fish exports from Sri Lanka to the EU, the Ambassador said that the GSP Plus and the fish ban issues are governed by the EU legislative framework.

“Sri Lanka should take measures to address issues on the ban and comply with the regulations,” Daly said.

The EU is Sri Lanka's largest export market accounting for around 26 percent of total exports. Sri Lanka has a trade surplus of around Euro one billion with the EU.

Bilateral trade between Sri Lanka and the EU was US$ 5.07 billion last year, a 3.6 percent increase compared to 4.9 billion dollars recorded in 2013, according to Commerce Department sources.

The EU is a major market for Sri Lanka's apparels which accounts for around 45 percent of its exports. Countries applying for the scheme should meet quality standards.

Small and medium sector enterprises will have to focus more on quality.

Sri Lanka's exports to the EU have improved.

It has understood the importance of constant improvement and competitiveness but there is no room for complacency when trading with the EU, Daly said.

The EU is working with the Sri Lankan government to address key issues such as export trade strategy, trade facilitation, compliance standards and sector specific value chain development.

“We are not expecting perfect implementation at the outset but Sri Lanka needs to demonstrate a full commitment to implement the conventions.

There should be a serious political commitment to be eligible for GSP Plus,” Deputy Director General, Trade, European Commission, Brussels, Nikos Zaimis said.

Sri Lanka must give the EU a binding undertaking. It has to submit reports to the EU and ILO on time and cooperate with the EU, Zaimis said.

When a country applies for the GSP Plus scheme it takes around 10 months to complete the process.

The EU has around six months to analyse the application and then the Council of the EU and the EU parliament discuss the application for around four months.

“It is a complex process due to many procedures that have to be followed. It is not an easy task.

It is not a free lunch for a country applying for the scheme,” Zaimis said.

The EU has a monitoring mechanism to ensure continuous dialogue with beneficiaries and identify areas which need to be improved.

Discussion are also on to reinstate the trade concession scheme which enables Sri Lanka to export to EU markets duty free.

Sri Lanka was one of the first beneficiaries of GSP Plus in 2005.

The new GSP Plus concessions will be for a ten-year period.

Discussions were also centred on bilateral issues such as facilities for investment, import duties and fish exports to the EU.

Exporters hailed the move to commence discussion on retrieving the trade benefits which will help Sri Lanka to enhance exports.

President, National Chamber of Exporters, Rohan Fernando commended the move to resume GSP Plus which will boost exports to the region. Sri Lanka continues to benefit from the normal GSP since 1970.

 - LF