The European Union (EU) cancelled the GSP plus facility given to Sri Lanka in 2010 because the government declined to implement some of its recommendations to strengthen good governance. Under the GSP plus, Sri Lankan exporters enjoyed preferential access to the EU market. With the loss of this facility, exporters have been unable to compete with countries such as Bangladesh that enjoy this trade facility in the EU.
Already, a few investors had shut down their operations in Sri Lanka, and instead opted to invest in Bangladesh.
A government official told the Daily Mirror on condition of anonymity that apparel and fish processing industries were the worst hit sectors by the GSP loss.
“These are products with a small profit margin. They cannot compete in the EU market without tariff concessions,” the official said.
Asked whether the government would reapply for this facility, External Affairs Minister G.L.Peiris said that it would not be done.
“We will not do it. There is no such need,” he said. (Kelum Bandara)