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Sri Lanka listed for GSP+ extension subject to probe outcome


The European Commission has listed Sri Lanka among countries to which it is extending from next year the GSP Plus duty free trade deal but subject to the eventual outcome of an eligibility probe.
Trade experts said the listing, which had earlier been expected only by December 15, means Sri Lankan exporters will continue to enjoy duty free access to European Union markets under GSP Plus till next October.

An EC statement said the GSP Plus list for 2009-2011 covers 13 current GSP Plus beneficiaries including Sri Lanka and three new countries; Armenia, Azerbaijan and Paraguay.

"Accordingly, GSP Plus preferences are granted to those countries from 1 January 2009 to 31 December 2011."

But the statement also qualified the extensions given to Sri Lanka and El Salvador both of which are being investigated by the EU to see whether they qualify and meet the criteria required to continue to enjoy the duty free benefits.

"With regard to Sri Lanka and El Salvador the fulfilment of the GSP+ eligibility is currently subject of pending investigations initiated by the Commission," it said.

"Specifically, in respect to Sri Lanka, the Commission's investigation will establish whether the national legislation of Sri Lanka incorporating the International Covenant on Civil and Political Rights, the Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment and the Convention on the Rights of the Child is effectively implemented."

Roshan Lyman, economic and trade advisor for the EU's local office, said Sri Lanka will continue to enjoy GSP Plus benefits during the investigation which usually takes up to a year to complete.

The EU has said it was concerned about alleged human rights abuses by Sri Lankan security forces in their campaign against the Tamil Tiger rebels.

The island's apparel industry, a key sector of the economy which generates a large amount of employment and foreign exchange earnings, has said it fears the loss of the GSP Plus trade benefits because of the human rights allegations.

A spokesman for the Joint Apparel Association Forum, an umbrella industry body, said the listing of GSP Plus beneficiaries by the EC this week means Sri Lankan exporters and overseas buyers will be assured of some predictability over the trade benefits.

"This does not mean we are entitled to the entire three-year period," he said. "If the investigation outcome is negative, the concession will be withdrawn."

The EU probe was announced on October 18 and a period of four months is provided to gather information about the country's eligibility, after which it can take another two months - till April - to examine the evidence.

"Also, there is provision in the regulation that if the European Council decides to withdraw the GSP Plus, then the decision comes into force after six months, so there is some predictability for trade.

"The assumption is that with the other six months also available, in all probability we will continue to enjoy the concession till next October."


~ LBO ~


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