Move to promote exports of developing countries

EU to revise Rules of Origin:

by Lalin Fernandopulle
 

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The European Union (EU) is expected to revise the Rules of Origin pertaining to exports of developing countries by January next year. The revision of the Rules of Origin will be done along with the renewal of the GSP Plus concessions granted to Sri Lanka.

Senior sources of the Department of Commerce said that the EU has accepted in principal that the prevailing Rules of Origin are an impediment to promote exports of developing countries.

"The Department of Commerce in consultation with public and private sector stakeholders is jointly making a concerted effort to revise the current Rules of Origin", the sources said.

The present GSP Plus scheme will expire by December this year and the new scheme will come into effect from January next year.

"There will be a technical review on the current GSP Plus scheme by the end of the year and we are confident that Sri Lanka will continue to enjoy the benefits of the scheme," the sources said.

The EU's objective in granting concessions is to promote sustainable development and eradicate poverty through enhanced trade and industrialisation in developing countries.

Despite competition in the EU markets with cheaper products from China and India the apparel industry has increased its market share in the region due to the tariff concessions offered by the EU since July 2005.

The country's utilisation of the GSP Plus scheme in 2006 was around 52 per cent compared to 40 per cent in 2005. The utilisation rate of the GSP Plus scheme by Sri Lanka is low compared to certain other countries due to the Rules of Origin.

Garments, fisheries, ceramic products, rubber and plastic and horticulture are some of the industries that benefit from the GSP Plus scheme. The EU has offered additional market access for our export products in the 27-member European community which is the largest trading block in the world.

The text of the Comprehensive Economic Partnership Agreement (CEPA) has been almost finalised at the last meeting held in Colombo last month, the sources said. Legal experts from both countries will go through the text before it is finalised this year.

The Ministry of Export Development and International Trade is planning to hold the meeting of the two Commerce Secretaries in Colombo next month. The meeting will be held between the Secretary to the Ministry of Export Development and International Trade S. Rannuge and the Secretary to the Ministry of Trade and Commerce of India R. Pillai.

The focus of the meeting is to finalise all outstanding issues. CEPA will pave the way for closer economic cooperation between the two countries.

"CEPA will not open the floodgates for Indian professionals to come to Sri Lanka. There will be a mechanism to regulate professional services. It will be a stakeholder driven process in consultation with professional bodies in Sri Lanka", Department sources said.