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After almost a decade of an isolationist foreign policy, Sri Lanka is now changing its course to re-engage with the West, a move welcomed by the European Union (EU). The new Ambassador of the Delegation of the European Union to Sri Lanka and Maldives Tung-Lai Margue spoke to the Daily FT about the renewed relationship with the country and the EU, appreciating the progress made in areas of human rights and reconciliation.
Margue was appreciative of the Government’s efforts to engage politically with the EU and spoke of moves to recommence aid and assistance to Sri Lanka. With the proposal by the European Commission to re-grant the GSP+ facility to the country, Sri Lanka is set to reap benefits from improved trade relations.
Speaking to Daily FT, Margue highlighted that Sri Lankan companies should actively engage in forging new trade relations with its 27 member countries to get the best of the concessions if granted.
Following are excerpts of the interview:
By Chathuri Dissanayake
Q: What is your impression of Sri Lanka?
A: I was here three years ago as a tourist; that was during the Rajapaksa time and therefore I was able to make a comparison, although when you are a tourist you don’t enter into the details of everyday life of citizens and politics. What I have noticed is there have been a lot of improvements in a number of areas, certainly in the area of human rights, and civil society is more at ease to express themselves. The media and press are free to report even things are that are quite critical about the Government. That is one of the striking examples and all the efforts of the Government in terms of reforms – economic, governance, and certainly political reforms.
This is not to say that everything is perfect and there is no need for further progress; on the contrary there is still a lot to be done. I also believe that GSP+ is an incentive to move forward in a number of areas, particularly on human rights and good governance but also in areas such as protection of environment and sustainable development in general which are inevitable interests. There has been definite progress since 2015.
Q: Going forward how does the EU plan to engage with the Government?
A: It is an ongoing process. We have got the framework. The framework is the partnership and cooperation agreement that has been adopted in 1995. It remains very valid; it allows for a lot of flexibility in terms of developing new areas of activities that we have. The traditional one was trade, and obviously this remains a main point, and is linked to GSP+. But I would like to mention that more political dialogue is taking place since this new Government is in place. In fact there was no dialogue at all with the previous Government.
This is a very important dialogue; it is more structured now because we have a working group dealing with human rights, good governance and so on. And we are meeting regularly with the Sri Lankan Government. Beyond that we also have another working group on migration. For the EU it is issue, so any cooperation is welcome. We have got an agreement on migration and we are very happy to have that agreement. Cooperation is another very important sector where I feel that there needs to be more work done.
Q: What are the main features of the political dialogue that the two parties have initiated?
A: You need to see the starting point; since the new Government came in, there has been a very clear orientation towards Western countries and particularly to the EU, since I am in charge of the EU. This has been done through a number of political gestures; it has been progressive, but clearly, there was a political commitment from this Government to engage with the EU – not only in the context of GSP+ but also in terms of other political areas to get rid of the political isolation (during the pre-2015 period). The same has happened in the UN.
The Government has been very open-minded towards renewing and starting cooperation. The same has happened with us and Sri Lanka in the manner I mentioned before. The political dimension is certainly an important one. I would recall that in 2016, Sri Lanka had the visit of the Commissioner for International Cooperation and Development Neven Mimica. This has been stimulus to look at new areas of cooperation going beyond traditional areas, to focus on the new areas; good governance and reconciliation including transitional justice. The other element was very clearly the fact that the Council of Ministers for Foreign Affairs has provided a strong indication that it is ready to engage with Sri Lanka as well. The last follow up has been, I believe, the important visit of the Sri Lankan Prime Minister to EU institutions in October, where he pledged for GSP+ and in the more general sense, reinforcement for cooperation. That was also another very important step. The other was the lifting of the ban on fisheries in May last year. Now, the commission has announced that it would be in favour of Sri Lanka regaining GSP+. Further the political dialogue is also taking place in an annual joint commission at very high level between Sri Lanka and the EU, where we see the whole scope of our cooperation.
Q: What will come after the EU Commission makes its recommendations to grant Sri Lanka GSP+?
A: This is a very significant first step. I think we need to be clear because there is sometimes a misunderstanding of the process of granting GSP+. I recognise that it is a complex one. We have to first get the assessment from the EU Commission, as the commission has the competency for trade issues including GSP+ which is a kind of preferential treatment in trade matters.
The commission has undertaken a very thorough assessment of the criteria and compatibility of Sri Lanka to these criteria to regain GSP+. On that basis it was considered that there was a lot of progress made in various areas that come under the scope of what is considered. The idea is to improve – make significant improvements in the areas of 27 conventions that the country applying for GSP+ needs to not only ratify but also implement. And that is the tricky part, it’s not so much the ratification, although it can be cumbersome, but it is the practical implementation.
On that basis the Commission has recommended to the EU Parliament and the Council of Ministers of the EU to grant GSP+ back to Sri Lanka. This would take two to four months. Because there can be a request for extension for another two months by either the Parliament or the Council if they want clarification or if they have doubts in certain areas.
It is not the end of the process; if GSP+ is confirmed, there will be a very stringent monitoring mechanism to follow. So one has to have in mind the Commission doesn’t look at whether or not all the elements of the 27 conventions are in place, but if there is substantial progress and if there are no salient failures. It was considered that there were no salient failures in this context.
Q: How will the monitoring be done?
A: It would happen through the working groups. There are two major working groups that we are looking at; the trade working group and the one that was mentioned before on good governance and rule of law and human rights in particular. These meetings will continue to take place on a regular basis and obviously the type of cooperation you will have between the EU officials and the Government here is crucial.
I must say the cooperation is excellent and we have only had only good contacts with them at the various stages, political and all other levels. We are consulting civil society and we are putting that feedback into the mechanisms; it important to take all the stakeholders’ views, not only the views of the authorities but also the views and grievances of civil society.
Q: There have been concerns from civil society, that although initial steps have been taken – for example, the setting up of the Office for Missing Persons, which has been done – progress beyond this point is slow. Are there any concerns in this regard?
A: Let’s put it this way, we understand that the pace of progress can be seen as too slow from the end viewer point, and in certain areas we would be very happy to see progress more rapidly. We – the European Parliament – would focus as a matter of priority on the assessment during the coming weeks that they make progress that is expected in the areas of counter-terrorism legislation – it is a new piece of legislation that has been announced by the Cabinet a few days ago, linked – by accident or not – to the timing of the GSP+ announcement of the Commission.
It is a very crucial thing and the PTA is one of the main elements – in the way it was applied that gave the momentum to repeal GSP+. So the links are very clear, and the commitments made by the Prime Minister are very clear, he wants the final draft bill not only on the CTA but also the Code of Criminal Procedure to fully conform with international standards of human rights, and that commitment was made at political level by the Sri Lankan Prime Minister in Brussels last October, and mentioned repeatedly to us – EU Heads of Missions in Colombo – on various occasions. Now we understand that it is a matter of weeks before the final draft is released. The devil is in the details and we will certainly be looking very carefully at each of the provisions.
But the political guidance and notes that were shared with us by the Prime Minister gave a very good impression, very positive steps in areas which were still unclear, such as access to attorney for the detainees, and other major elements, which were also mentioned. We hope that this would now translate into legislation accordingly. The process leading to adoption by Parliament will go smoothly.
Implementation of this is in the interest of the Government certainly, but also it is in the interest of the citizens of the country. This is something I would like to underline very much. It is not so much we – the EU – that wants it, but it is the commitment made by this Government, on its own, we have not forced anybody. As I said, it is part of the re-engagement with international community that has taken place, including the EU and Sri Lanka cooperation. It is also very similar to requests at more international level, also by the UN.
I would like to also highlight one thing; all of these 27 conventions are not so new, the crucial ones were already ratified by Sri Lanka but not implemented. Some of them have been ratified and implemented since this new Government came into power, which is one of the elements that we consider that progress has been made. GSP+ would not have been granted initially if the core elements were not in place. The question now is, what are you doing to implement the conventions and to guarantee that they are functioning?
Q: What are your main areas of concerns in monitoring and implementation?
A: I would say in general focus needs to be put on few main issues – to stop practice of torture by security forces, and this needs to be clearly made through stringent provisions. The second area is more in relation to violence against women and children in all its forms. The third element is to ensure that no harassment takes place against trade unions as it is a part of the concerns of the EU to respect labour conventions.
Q: When it comes to practice of torture by security forces, civil society has highlighted that this has continued during this Government as well; there were a few incidents that have been highlighted. How has the EU assessed the situation?
A: As I said before, that element is part of the assessment that took place, and the continued assessment that would take place under GSP+ once granted. There will be a mechanism to look at these matters. There needs to be a clear difference made between local and isolated incidents – they are all regrettable, there should not be an incident that is considered benign – and institutionalised violence.
What we felt before was that there was a kind of institutionalised form of abuse of rights, in particular in terms of torture by the security forces, and that is totally unacceptable. So I leave it also to the NGOs to continue to let us know, inform us about cases. But there needs to be a way that you can control the system and the isolated incidents. The people who commit these crimes should be brought to justice. There needs to be a clear signal that there would be no impunity anymore. That’s the key element. We understand that this has been understood and that the President is keen that the message is given. So we have no doubt about the sincerity of the Government in its intention to put an end to this matter.
Q: Taking the key elements separately, in terms of your observations, how has the situation concerning violence against women and children improved so far?
A: I think there needs to be a lot more progress, I haven’t personally observed progress; what can be said is that it is a matter of concern. When I was in the north and east, there were women who were telling me that there was sexual violence against women and children and something has to be done. It should also be addressed through education, that element of education; Government should address and make more progress.
Q: How will the outcomes of the UNHRC sessions in March, which will feature Sri Lanka in relation to the resolution adopted calling for reforms and accountability, affect the decision to grant GSP+?
A: It is an element that will be of interest to the European Parliament, but I cannot say how it will impact as they are sovereign in the way they interpret it. But let’s be clear, any substantial progress the Government is able to demonstrate from now to the moment the EU Parliament and Council are supposed to give their own assessment will be important. It is difficult to assess the impact of the resolution but it depends on the attitude of the Government. If the Government says ‘okay, we want to be supportive of re-introduction of the resolution,’ it will demonstrate the Government’s goodwill and its readiness to be very closely engaged with the UN. That could be seen in a positive way, I suppose, by the EU Parliament.
Q: The EU lifted the fishing ban on Sri Lanka last year, and since then how satisfied are you with the country’s progress?
A: There has been a major effort made by the Government in order to get the fishing ban lifted. Sri Lanka is now a model of good behaviour. It has needed a lot of investment and even financial investment by the Government to ensure that monitoring done by the Lankan authorities is efficient.
We were very impressed by how the work has been done and put in place by the authorities to effectively control how the fishermen are operating, also beyond Sri Lankan territorial waters in the high seas also. I really found this was a very significant example of tangible progress, where you see that if there is a political will, then the technical parts fall into place as well.
This is what we would like to see in other areas as well. Here we are very happy with the progress.
There is a monitoring system in place. But from what I see, it would be very astonishing that Sri Lanka would go backwards, because the country has become an example in the region.
What I would like to add is that lifting the ban is one thing so that it allows to exports to resume. By the way it is not an insignificant part of exports that Sri Lanka has got with the EU in 2013.
The last available statistics show that exports amounted to Euros 73 million. When GSP+ is granted, this would mean no tariff costs anymore for fishing exports, which will then allow to go beyond the export levels that I mentioned in 2013. There would be no custom tariffs, so one can imagine the kind of boost exports will receive.
Q: Apart from GSP+, are there any plans to engage with the country in terms of implementation of new projects or aid to be given?
A: That is a chapter that we have not spoken about. Beyond the GSP+ debate, if you look at the last decade, the EU was funding projects in Sri Lanka up to Euros765 million, which is a substantial amount. This was spent in various areas, particularly humanitarian aid assistance linked to the post-tsunami reconstruction needs, but also even during the previous period, before the current Government, development aid was given focused on rural areas in the Northern and Eastern Provinces.
We have also been looking at supporting local capacity building, as there is a strong need for the local communities to be organised more independently, to have access to services such as water supply and electricity. But this was the type of things we were focusing on before. We are about to revise what we call the Multi-Annual Indicative Program, which allocates funding for development programs for countries. Since there was a kind of hold in relations during the Rajapaksa regime, the package covering 2014-2020 has not been committed much yet, and we are looking at how to re-profile the remaining money. We are looking at something like Euros 130 million left for the period to be covered from now to 2020 with probably two or three years more for the implementation, stretching to 2023.
Obviously the area of rural integration would still remain an important one. But we will still look at other means to intervene – no longer projects as much through implementing partners, as we did until now, but more on a partnership with the Government through budget support. But in order to do this we need to go through a certain number of steps.
The first one would be to encourage improvement in the Public Financial Management (PFM) in this country, and this would be the first part of what we are going to propose to the Sri Lankan Government. We are already in touch with the Government, but it still needs to go through the system in Brussels, with about Euros 10 million for the initiative. Beyond that, we will look at a second area of development aid, which is reconciliation and governance; obviously a very crucial one, where we will be closely working not only in cooperation with the Government, but also with the UN implementing partners that we are used to working with and in certain cases EU member state agencies.
The first step in terms of concrete help toward reconciliation will start this year, with projects looking at transitional justice and matters such as capacity building for supporting the Secretariat for the Coordination of Reconstruction and Survey Department – because there is a need for support on capacity for having more reliable data and reports. We will also be looking at methods of resettlement because that was also a request of the Government. This would start in the coming weeks; it’s a project amounting to Euro 8.1 million and that will allow to make a bridge between the immediate needs in these areas and then more detailed support that could come but not before next year.
Q: How will Brexit affect Sri Lanka’s trade agreements and the relations with the EU in the medium and long term?
A: In the medium term, it does not affect anybody because the UK will remain a full member of the union until it is gone. There is this famous Article 50 that needs to be triggered by the UK authorities. I understand that the new UK Prime Minister has decided that it would take place in March this year, and this would trigger a period of three years before completing the negotiations. It is only after negotiations have taken place – negotiation on the exit and the negotiation on future relations – that we will have some clue of what impact it would have on the rest of the trade agreements. Until then there is no change; if GSP+ is regained, it will mean the UK will fully be part of the obligations to have no longer custom tariffs for products coming from Sri Lanka.
But I would say beyond what will be done in terms of using GSP+ to export towards one specific country of the EU, it would be well advised for Sri Lankan exporters to try to develop the broader picture, to try to develop their trade with other EU member states. We have 27 member states and the UK is just one country. I think if I had any advice to give Sri Lankan investors, it would be to diversify what they are doing and to take the full advantage once GSP+ is granted back. Diversify in terms of countries of destination for their products and in order to be labelled as a Sri Lankan product, there needs to be certain to component of the production that needs to take place here.
This would perhaps encourage Sri Lankan companies that left the country when GSP+ was taken to come back or other companies from neighbour countries to come back here and invest here to take advantage of GSP+. That is a fact that people always don’t have in mind but that can be very stimulating for growth and building of new companies here. You need to understand that GSP+ has only been granted to eight countries; among the eight countries there are only two other Asian countries, Mongolia and Pakistan, Sri Lanka would be the third. It gives a type of competitive advantage for Sri Lanka from that perspective, it encourages industries to come here and employ Sri Lankan people.
