'GSP plus coming' | Daily News

'GSP plus coming'

Trade concessions under the Generalised System of Preference Plus for Sri Lanka, which were revoked by the European Union (EU) in 2010, will likely be reinstated next year, Foreign Affairs Deputy Minister Dr. Harsha de Silva said.

"By the end of December 2015, we will be formally reapplying for the GSP Plus. It is extremely critical that it be reinstated," he said.

The EU is the largest export market and the second largest import source for Sri Lanka, and in 2008, textiles and garments accounted for the bulk of exports from Sri Lanka - 37.4 percent of exports from Sri Lanka went to the EU, while 22.4 percent went to the United States. The GSP Plus ensured duty-free entry into EU countries, facilitating a boom in the textile trade and employment in Sri Lanka. Sri Lanka gained about US$ 150 million annually due to preferential tariffs. In 2010 however, the textile trade suffered a blow when the GSP Plus was suspended due to the Sri Lankan government's violation of human-rights agreements.

The government refused to allow the EU to probe into its rights records, claiming it was a violation of the country's sovereignty.

The GSP Plus withdrawal meant that Sri Lankan shipment to the EU would bear an import-duty of almost 10 percent and that factory workers were fearing losing their jobs. Dr. de Silva explained that the country "has not been able to leverage the GSP Plus for the past five years, and if we were able to do that, we would have seen more jobs created, increase in growth and poverty alleviation."

Clothing exporter and Joint Apparel Association Forum chairman A. Sakumaran also concurred that there is an obvious correlation between GSP Plus concessions and economic growth via Sri Lanka's apparel industry. The new government today means a new relationship between Sri Lanka and the European Union. "We now meet all the criteria required by the EU for the GSP Plus," Dr. de Silva said.

"Good governance, democracy, respect for human rights - these are things we are supposed to do. And by doing so, we can utilise it to our benefit. The previous government completely ignored the need for GSP Plus, but the fact is that the loss of GSP Plus has had serious negative implications on the economy. Foreign policy and economic policy need to be in synch with each other - we can't have them at cross-purposes like it has been in the past," he explained. 

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