Sri Lanka Loses GSP+
photo by Garments Without Guilt
The European Union has withdrawn its GSP+ tax concession on Sri Lankan apparel imports. This tax affects 30% of all apparel exports, according to the Central Bank. The apparel industry employs thousands of people and jobs may be in jeopardy without preferential access to this major market. The EU stated that it is withdrawing the concession because Sri Lanka failed to respond to its demands by July 1st. To quote the press release:
Sri Lanka will temporarily lose its preferential access to the EU market starting from August 15th 2010. The decision to withdraw the preferential tariff system GSP+ from the country had been taken by the Council of Ministers in February 2010. Based on dialogue with the Sri Lankan authorities on shortcomings in its implementation of three UN human rights conventions, the EU in June offered to delay the entry into force of the Council decision by a further six months. In exchange, it asked for tangible and sustainable progress on a number of outstanding issues. In the absence of a reply from the authorities in Colombo by 1 July, the Commission is not in a position to table a proposal with a view to delaying the Council Decision. (European Union)
The GSP+ is a specific tariff tied to sustainable development and good governance under the EU’s Generalised System of Preferences. “Under GSP+ the EU provides additional preferences to economically vulnerable developing countries which have ratified and effectively implemented 27 international conventions in the fields of human and labour rights, sustainable development and good governance and which voluntarily apply for GSP+ benefits and accept the associated conditions. Sri Lanka is a current beneficiary of GSP+, along with 15 other Developing Countries. Like all other GSP+ beneficiaries, Sri Lanka committed to maintain its ratification and effective implementation of the 27 conventions when it applied for the scheme.”
This scheme enabled Sri Lanka to supply cheaper and more competitive exports to the European Union. In February 2010, however, the EU decided to temporarily withdraw the concession based on human rights issues which a 12-month investigation found lacking. The government has been in discussion with the EU since then. In June the EU offered to extend the benefit for another six months. The government, however, did not give a written response by July 1st, effectively ending talks.
“We very much regret the choice of Sri Lanka not to take up an offer made in good faith and in line with the EU commitment to a global human rights agenda. We will however keep the door open for Sri Lanka to return to talks,” said HR/VP Catherine Ashton. ”Our precedent-setting offer sought to recognise some tangible progress yielded during these last months of dialogue,” added Commissioner Karel De Gucht. ”We hope that these results, however partial, will be sustained, in line with the incentivising characteristics of GSP+.”
Government Response
In response government spokesman Minister Keheliya Rambukwella said “We will not accept the conditions put forward by the EU. We are very clear on that. The Sri Lankan government has made alternative arrangements to meet the consequences. The GSP loss is only around 85 Million Euros and we are also looking at other markets to meet our needs.”
The government then referred to Central Bank release which stated that Sri Lanka would make up for the loss of GSP+ through better economic management and the expanded growth coming from the end of war.
Further Reading: Background info on Sri Lankan trade from the EU
A perfectly understandable and a correct decision by the EU. The GSP was given based on an agreement with SL And when that agreement is not fulfilled naturally the GSp needs to be withdrawn. Maybe we should start exporting to China at the prices that prevail there.
A very beautiful unemployed girl was cut to death using a very sharp club during the 1987 or 1988(I don’t remember exactly the date,month and the year). The girl was a pupil of my mother at school and she was out of mind for some days and managed to meet late Hon.Rohana Wijeweera. Hon. wijeweera too got very upset following the complain and my mother told us that he was crying while listening to the incident. The girl had a love affair with a soldier and another youth who(not a JVPer at all) of the village organized the crime for extreme jealousy because he was un- employed.
The factor un-employment is not a joke in SriLanka and TO WHOM IT MAY CONCERN.
Its party time at Sunday Leader. !
Champain expert Mrs Wickramathunga (2nd one) to the fore please.
“peralunupita hondai kiyanawa”
It is time to declare all out war on Tamil Diaspora. Sri Lanka should hit them where it hurts them. Nationalise all the assets of the Diaspora Tamils to start with.
Hello, this shows how foolish you are. You cannot nationalise assets of diaspora whereas most of them have assets in their country of residence. Also your comment shows that you are eager to get resources belong to Tamils, whether they are living in Sri Lanka or overseas, shame on you man! Better go out and beg for this than putting your 2 cents comment..
So what? I would rather die a patriot than slave for the suddas.
Patriot for the regime or country ???
Mr.Muzammil,As my mother told me Hon.A.C.S.Hameed was aranging a job to this poor girl in Ceylon Tobaco ltd.
Hi pali,
Hameed was a remarkable character.First to be honoured as foreign minister, usually part of premiership,before it was created.Nice to see people remember him with love and gratitude,very rare these days.
To talk about jealousy and the destruction it causes to the nation,we need a
different page.As the subject matter of the page is about the loss of GSP+,it’s
time saving,if I’m right,to stick to the point.That’s why I picked up a line from
a song “kaliyuga kaleta upanna nuwanakkarayo dennek” which perfectly
describes the situation of the govt.Nice we are meeting here.
If Sri Lanka doesn’t want to comply then EU should stop GSP. Law and Order is a must for good governance.
When thugs and robbers are running the country…this is what you get….middle finger.
If the govt removes the Fuel tax, the cost of production will come down to a certain extent, the massive defense budget must be cut down so that the taxes need not be excessive… Who is really worried about the poor people who will loose their jobs…. You can visit and tell the families affected that only certain percentage will loose their jobs and the person lost the job are in that group and they have to starve
At present Bangladesh minimum wage is US$ 24.00 for a machine operator, This is due to their low cost of living. What is the cost of living in Sri Lanka. How can we compete on prices without the GSP+ ???
..INCREASE MIHIN FLIGHTS TO MIDDLE EAST EXPORT MORE..MORE..MORE HOUSEMAIDS…..IF THIS IS NOT ENOUGH CHARTER RUSSIAN CARGO FLIGHTS…AND EXPORT MORE HOUSE MAIDS TO SERVICE ARABS,,BANGALDESH IS A POOR COUNTRY….BUT SHE HAS BANNED HOUSE MAIDS EXPORT LONG BEFORE TO ARABS..ATLEAST BANGALDESHIES HAVE DIGNITY….
..DONT WORRY GUYS THEORITICAL LAW PROFESSOR PERIES WILL FILE A CASE AGAINST THIS DECISION….TILL THEN YOU CAN GO FOR FISHING….MAY BE MAHAVAMSA WILL GUIDE YOU HOW TO SURVIVE…
GSP+ removal is due to the lobbying power of the tamil diaspora money.Why UN is silent to other big countries committing war crimes.
Big countries have good PR guys at international level and UN but Sri Lanka has a bunch of idiots
……SO.SO NOW YOU KNOW THE POWER OF DIASPORA…
Follow rules of international law and you will not lose anything. To me Sri Lanka has lost victory. Showing to the world they have got useless brains. What a shame?
Attack is the best form of defence…….Sri Lanka is a country for idiots.
The GSP+ works both ways. It benefitted Sri Lanka’s garment industry by not attracting EU Import Duties and making them cheaper for their consumers. I only hope this doesn’t give the green light to the likes of Mr. Weerawansa to commence protsting – his style. This is probably an unfair decision and we should appeal to the World Trade Organisation. After all, USA and EU constantly uses it to settle disputes between them. Even Sri Lanka has used it over a dispute with Brazil in 1996. In all probabilities, the GSP+ will be reinstated when they find a face-savng excuse.
If this is so valuable-and affects our Economy-why cant we implement what they are asking for? Inwhose interest are we holding those terms and conditions at bay? Obviously for political reasons-
Why not Weerawansa makes another “Show of Laugh”?