Crucial talks in Brussels this week:

Renewed GSP status with EU imminent

By Manjula Fernando

Sri Lanka moves closer to regaining the highly advantageous ‘GSP Plus’ exporter status with the lucrative European Union market when a crucial round of talks on the renewal of the GSP plus tariff concessions takes place in Brussels, Belgium, this week.

Reacting to the decline of human rights conditions in Sri Lanka during the previous regime, in 2010 the EU removed Sri Lanka from its list of countries given concessions under the Generalised System of Preferences (GSP) concessionary trade provisions to help selected developing countries gain access to the large and lucrative European market.

Two officials from the Department of Commerce and the Foreign Ministry are due to travel to Brussels this week for the talks.

An authoritative diplomatic source said Sri Lanka was optimistically continuing the talks with officials of the EU Trade Working Group, expecting an early resolution of the outstanding issues. This source said the lifting of the fisheries export ban by the European Commission last week was not an impetus to automatically renew the GSP Plus concessions but it would now certainly allow the Sri Lankan authorities to fully concentrate on pursuing the GSP renewal.

“We are talking about 28 countries here. We have to handle it very carefully,” this official said. “The EU is anxious to know that everything in Sri Lanka is stable and transparent before the tariff concessions, which are tied to compliance with international human rights laws, are renewed,” he added.

Shortly after President Maithripala Sirisena’s assuming office, the new government revived the EU Sri Lanka Joint Commission and serious talks on regaining the GSP Plus tariff concessions began in March 2015.

Prime Minister Ranil Wickremesinghe took up this matter as a priority subject of the government and Foreign Minister Mangala Samaraweera undertook a mission to Europe carrying a special message from the Prime Minister seeking the renewal of the special trade concessions.

Bilateral trade between Sri Lanka and the EU exceeded US $ 5.07 billion in 2014. Of this, 69% consisted of Sri Lankan exports to the EU. Apparel accounted for the majority of Sri Lankan exports to the region, earning US $ 2.16 billion in 2014.

Sri Lanka was among 16 chosen countries which enjoyed special GSP plus tariff lines for six years.

The EU’s ‘Generalised System of Preferences’ (GSP) allows developing countries to pay less or no duties on their exports to the EU. The “GSP plus” concessions which Sri Lanka enjoyed were enhanced preferences that meant full removal of tariffs. The loss of GSP status is likely to have cost the country hundreds of millions of dollars in additional tariffs while also constraining its ability to competitively expand exports to the EU.