The Sunday Leader

Govt To Re-Apply For GSP

By Mandana Ismail Abeywickrema

The government is to re-apply for the EU GSP Plus trade concession that was withdrawn from the country in August 2010 for the non-compliance of the conditions connected to the facility, The Sunday Leader learns.
Despite government claims in 2010 that the loss of the GSP Plus facility would not have a severe impact on the country’s economy, the EU’s decision to withdraw the facility was estimated to cost the government US$ 1.5 billion.
The continuous closure of industrial factories and the increase in the unemployment rate due to the loss of the GSP Plus facility has now forced the government to re-think its stance on the EU’s trade concession.
The Sunday Leader reliably learns that the government is currently engaged in preparing the initial paperwork related to the re-application for the GSP Plus facility.
The necessary documents are being prepared by the Commerce Department and are to be handed over to the EU Commission in June 2014.
“Although the final application has to be sent by June 2014, the initial paperwork is currently being done,” a government source said.
The government also said at the External Affairs Ministry consultative meeting in parliament last week that discussions were underway to re-apply for the GSP Plus facility.
EU Commission’s Ambassador to Sri Lanka and Maldives, Bernard Savage when contacted said that he was unaware of the government’s decision to re-apply for the GSP Plus facility.
However, he said that EU would look at the conditions that were previously not met by the relevant applicant when considering the request.
The EU’s decision to withdraw the GSP Plus facility from Sri Lanka in 2010 was based on the government’s failure to show improvement in three main areas such as the application of international conventions agreed to by Sri Lanka on civil rights, labour rights and children’s rights.

Meanwhile, the loss of the GSP Plus facility that was granted by the EU to Sri Lanka is continuing to result in the closure of factories in the country making thousands jobless.

It was earlier reported that two such factories had closed down on January 2 since they are shifting their businesses to Bangladesh, a country that enjoys the GSP Plus facility.
President of the Inter Company Employees Union (ICEU), Wasantha Samarasinghe said that contrary to claims made by the government, the loss of the GSP Plus facility has affected many private sector businesses in the country.
He observed that the recent closure of two garment factories in the Gampaha District has affected the direct employment of 1,500 while a large number of indirect employment opportunities have also been affected.
He said that Chrystal Sweater (Pvt) Company in Malwatta Investment Promotion Estate in Nittambuwa was closed down on January 2nd and Firefox Pvt Ltd in Pamunugama in Wattala was closed down on the same day.
According to Samarasinghe, these factories have been established with the Board of Investment (BoI) approval.
“The government assured that the country would not face any economic fallout due to the loss of the GSP Plus facility. But now factories are closing. The government needs to provide solutions to the current crisis,” he said.
Samarasinghe added that the government has failed to address the issue of people losing their jobs.
“Although some employees have received some form of compensation payments due to the intervention of traded unions, some other workers have lost their jobs even without proper compensation,” he said.
The EU’s GSP Plus tariff concession allowed Sri Lanka to sell over 7,000 products to the EU countries tax-free. The country’s garment industry was the most benefited by the facility.
It is learnt that 10 garment manufacturing factories have been closed in Biyagama, Nittambuwa and Katunayake investment zones.The government has stated that these closures have caused losses amounting to around Rs. 5 billion to banks.


13 Comments for “Govt To Re-Apply For GSP”

  1. union

    Re-apply…. short sighted leadership misguiding us under patrotism and we as a public suffering by loosing our livelyhood. Criminals are thriving in our country and only criminals are deciding our fate in parlianment. Good example is suspendind CJ by preseident. GSP is going to be a daydream unless otherwise we eliminate ruthless criminal regims.

  2. Lucky Weeramantry

    All Boru Talk. Some Time Back The Govt Said We Can Manage Without GSP Given By Western Nations. Now We Are Begging Again For GSP. Why Can’t China Bail Us Out. Our Foreign Minister Should Resign. This Is Sinhala Pride.

  3. Len

    I may be wrong my assumptions is these factories closed for simple fact most of the employees found better jobs in the booming IT, Space technology, financial,Oil Exploration, High end Tourism & Aviation(MIHIN Air) sectors. So all is not lost Sri Lanka now been class as the worlds most dynamic economy with per-capita income and GDP is sky rocketing on monthly basis next couple of years labor intensive menial work will be gone for good.Sri Lanka wil have to relay on Migrant workers for sure.My assumptions are based on research done by reading most informative accurate news paper in Sr Lanka The Daily News of Lake House. So when the government said loudly that Sri Lanka don’t need help from West and the IMF not only statement was factually correct the statement was followed by a picture of pigs flying around the Parliament Building.

  4. Ratana

    According to G L Peris a few years ago there was no impact on our income without the GSP. If so, why this Govt is begging for same again? bloody idiots.

  5. Robert

    It was bloody Cabraal the inefficient G. of the central bank spoke that the GSP
    is not so necessary for the garment trade and if the EU cancels the GSP the
    business will develop, but today most of the garment factories are closed and
    people in thousand are without employment. It is advisable that this govt.
    to sack this Cabraal before he causes more problem to the country,

  6. renu

    Where are the people who said they could do without GSP plus now. Big talk Weerawansa, and other GOSL top wigs. You can eat your own words now

  7. Our government always fool us in big way. In 2010 President Rajapakse told us that loosing GSP will not affect our garments factory. Whay happened in 2012 most of the garments factories are closed. Who is telling us the truth? We are beggars. We beg all the time from IMF and China for money. Then our politicians live happily on the borrowed money. Today our country is bankrupt. If we want to become a miracle of Asis we need reconciliation with the minoriites and asked the minorities to forget the past and work together to improve our country economcally. Can Mahinda Rajapakse do that? time will tell.

  8. Shaik Anwar Ahamath

    The GSP Plus concession cuts both ways. There are many retailers in EU that are lamenting the loss of the concession because they were selling a plethora of good quality but cheap garments from Sri Lanka. Whenever I holiday in Sri Lanka, I stock up garments that 1/10th the price in Europe.

  9. Mohan

    It is simply strange and confusing to learn that the Government was re applying for the GSP. It was very recently that we were made to believe that we are not granted the GSP as we are no longer eligible for it, given the economic development the country has achieved!

  10. Rajani

    I think our government must fulfill the GSP+ conditions including the human rights. We just can not expect from others everything and we have to pay a price. Some of our politicians talking big way and they are hiding now. It is the time the government must correct all the mistakes and move forward the developing the country.

  11. mottapaske

    We dont need GSP plus. Why should we apply and beg from them when we are totally self suffient. Well experienced politician our brilliant highly popular econimic genius Hon Minister Mr. Basil Rajapakse said some time back that we can give loans to westen countries. We are well developed today. We dont need it like Bangladesh and other poor countries. Our smart Intelligent brave patriotic father of the nation President honorable THE Perci Mahendra Rajapakse is taking SriLanka towards the right direction. Our patriotic monks are behind him, supporting him for anything. Its a great sign of serius develpoment in the country. Then we have Hon Champika Ranawaka, Mr Gammanpila, Hon Dinesh Gunawardene, Mr Rathana, Mr Inamaluwe, Mr Dulles, Mr Weerawanse etc to give him the fullest support to our great leader t make this a pure Sinhala Buddhist land. Why we need GSP when we habe a KIng Family.

  12. Nimal

    Why should we re apply and try to hold this tigers tail again ?. What was the situation when we did not have it before GSP . These are temporary plastering. When they withdraw, we have to close down again.

    Instead, why don’t we try to create, providing conducive environment, some of our versions of Samsung, LG etc.

    Commerce department, EDB have to be outward far reaching thinking. They have to think beyond Tea Rubber and coconut , apparel and hand loom if they are to take Sri Lanka to developed world. Institutions like EDB have good knowledgeable people, but they have been transferred to corners and their voices have been suppressed.

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