The GSP+ trade concessions given to Sri Lanka in July 2005 for its exports to member states of the European Union (EU) will come to an end when the facility lapses from midnight today.
However, EU delegation head Bernard Savage told Daily Mirror Sri Lanka was free to resume talks with the EU to re-negotiate or review the extension of the GSP+ facility. “We encourage the Sri Lanka government in this respect and are ready to facilitate further discussions between Brussels and Colombo,” Mr. Savage said.
Commenting on the withdrawal of the trade facility, Central Bank Governor Ajith Nivard Cabraal said there would not be much of an impact on Sri Lanka’s economy as the government had expected the facility to be withdrawn and was prepared to face such an eventuality.
“The government has brought down inflation to almost a single digit and the interest rates are between eight per cent and 12 per cent. This has helped boost the economy and absorb any negative effect on the industry after the GSP+ withdrawal,” Mr. Cabraal said.He said the government had granted a range of concessions including tax relief to the apparel and garment industry to face the challenge and added that garment factories in the free trade zones have in hand export orders for the next six months.
National Chamber of Commerce and Industry Secretary General E.M. Wijetileka said the withdrawal of the GSP+ concession would affect the rural sector in particular as many of the garment industry employees were from rural areas.“There is also the possibility that investors in the garment industry may move to countries such as Bangladesh and Myanmar because labour costs here may rise in the absence of the GSP+ concession. The industry will find it difficult to venture into new markets,” Mr. Wijetileka said.
Free Trade Zone Workers Union General Secretary Anton Marcus said the withdrawal of the GSP+ concession would have a negative impact on the apparel and garment industry.
“The GSP+ concessions have benefited 7,200 export categories and most of it was for the apparel and garment sector. Sri Lanka will find it difficult to expand the industry and find new markets in future. There will be a high level of lay offs in the industry,” he added.
Mr. Marcus said Sri Lanka can still reapply for the trade facility and resume talks with the EU.
In June the EU asked the government to fulfil 15 conditions including the implementation of the 17th Amendment, repeal of emergency regulations and the Prevention of Terrorism Act and certain clauses of the Public Security Ordinance if the EU were to reconsider the extension of the GSP+ facility beyond August 15.
The EU, among other matters also asked the Sri Lankan government to amend the Code of Criminal Procedure; allow citizens to submit complaints to UN Human Rights Commission; publish the list of LTTE combatants in custody, and ensure journalists can exercise their professional duties.
Dailymirror
Central Bank says the GSP+ benefit to the country is nearly US$ 1 Billion (Rs. 112 Billion)
