25 May 2017 12:00 am
The International Chamber of Commerce (ICC) Sri Lanka welcomed the quick initiative taken by the government to regain GSP Plus as it would pave the way for duty free access to the European Union (EU) market on a whole range of products.
It was in December 2009 that the EU decided to withdraw temporarily the GSP Plus benefits to Sri Lanka. This decision was based on the findings of the Commission of Investigations launched in October 2008 and completed in October 2009.
In view of the report, no satisfactory progress was shown by Sri Lanka in the implementation of the three UN human rights conventions such as Civil and Political Rights, Convention against Torture and Rights of the Children, which were related to grant the benefits of GSP Plus.
ICC Sri Lanka Chairman Keerthi Gunawardane said that the present government has immediately continued a dialogue with the EU in a positive manner to restore GSP Plus.
“The International Chamber of Commerce Sri Lanka appreciates the efforts of the government to restore GSP Plus. This can have a lot of positive effects to the Sri Lankan economy. In addition to the possibility of developing business within the EU, the existing businesses can improve the competitiveness and profitability,” he added.
“Unfortunately, there was no significant interest displayed by Sri Lanka since 2010. This slow process caused a heavy damage mainly to the export trade with the closure of many small and medium-sized garment factories amounting to a loss over US $ 750 million of exports,” he noted.
In 2005, the EU introduced special incentive arrangements under the EU GSP scheme called GSP Plus and the special feature of this scheme is all the eligible products under this new scheme could be exported by selected beneficiary countries to the EU totally import duty zero or duty free.
Developing countries and least developed countries recognised as beneficiary countries are offered preferential tariff reductions for their export products to developed countries under the GSP system. It is a removal of partial or entire tariff charges for goods exported by beneficiary countries.
The beneficiary countries are bound to be adhered to certain international labour regulations and manufacture the products to compete with international standard together with certain percentage of value addition accepted by the offer countries.