The European Commission, the executive body of the European Union (EU), yesterday proposed to restore the special concessions under the Generalized Scheme of Preferences Plus (GSP Plus) for imports from Sri Lanka in exchange of an improved human rights and labour record.
“The European Commission today proposed that a significant part of the remaining import duties on Sri Lankan products should be removed by the European Union in exchange for the country’s commitment to ratify and effectively implement 27 international conventions on human rights, labour conditions, protection of the environment and good governance.
These one-way trade preferences would consist of the full removal of duties on 66 percent of tariff lines, covering a wide array of products including textiles and fisheries.
These preferences would come under a special arrangement of the EU Generalised Scheme of Preferences, known as GSP+,” a statement issued by the European Commission said.
It also noted that the European Parliament and the Council have now up to four months to raise potential objections before the measures become effective.
Trade Commissioner Cecilia Malmström said, “The GSP+ preferences can make a significant contribution to Sri Lanka’s economic development by increasing exports to the EU market. But this also reflects the way in which we want to support Sri Lanka in implementing human rights, rule of law and good governance reforms.”
“I am confident of seeing timely and substantial further progress in these areas and the GSP+ dialogue and monitoring features will support this reform process. This should include making Sri Lankan counter-terrorism legislation fully compatible with international human rights conventions,” she added.
The European Commission statement noted that granting access to the GSP Plus scheme does not mean that the situation of the beneficiary country with respect to the 27 international conventions is fully satisfactory.
Instead, it offers the incentive of increased trade access in return for further progress towards the full implementation of those conventions and provides a platform for engagement with beneficiaries on all problematic areas.
“As is the case for all GSP+ countries, the removal of customs duties for Sri Lanka would be accompanied with rigorous monitoring of the country’s progress in the area of sustainable development, human rights and good governance,” the statement noted.
Sri Lanka had already benefited from GSP Plus in the past. In 2010, the EU decided however to stop the preferential treatment for Sri Lankan imports due to the failure to address the reported human rights violations in the country.
In 2015, Sri Lanka’s new coalition government set out a path of major reforms aiming for national reconciliation, respect of human rights, the rule of law and good governance principles, as well as sustainable economic development.
The government applied for GSP Plus in July 2016 and the European Commission’s assessment has concluded that it met the GSP Plus entry criteria set out in the EU regulation.
The EU is Sri Lanka’s biggest export market accounting for nearly one-third of Sri Lanka’s global exports. In 2015, total bilateral trade amounted to 4.7 billion euros.
The EU imports from Sri Lanka amounted to 2.6 billion euros and consisted mainly of textiles as well as rubber products and machinery.
There are currently eight GSP Plus beneficiaries: Armenia, Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Pakistan, Paraguay and the Philippines.