Five-member EU team arrives as part of GSP+ review

A five-member delegation from the European Union (EU) has arrived as part of the review process of the GSP+ concessions enjoyed by Sri Lanka. 

The delegation comprises of Senior Adviser on Trade and Sustainable Development Nikolaos Zaimis, European External Action Service (EEAS) Head of Division South Asia Ionnis Giogkarakis-Argyropoulos, GSP Trade Preferences Coordinator Guido Dolara, European Commission Directorate-General for Employment, Social Affairs and Inclusion Head of Unit Lluis Prats and EEAS Desk Officer for Sri Lanka and the Maldives Monika Bylaite.

The visit is following the EU Parliament in mid-June adopting a resolution calling on the EU Commission to consider temporary withdrawal of Sri Lanka’s GSP+ status and the benefits that come with it, noting the Government’s persistent failure to adopt and enact human rights reform and repeal the draconian Prevention of Terrorism Act (PTA). The Resolution on Sri Lanka was adopted with 628 votes in favour, 15 against and 40 abstentions.

During its week-long stay, the delegation is scheduled to meet Government and private sector representatives, civil society, trade unions before submitting a report to the European Parliament.

It will assess Sri Lanka’s compliance with 27 international conventions related to GSP+, including human rights, labour, environment and good governance.

Sri Lanka’s exports to the EU, excluding the UK, in the first eight months grew by 32% to $ 1.88 billion out of $ 7.8 billion in total exports. 

The top five EU markets which accounted for 80% of Sri Lanka’s total exports to the EU were Germany $ 481.41 million (up 29.74%), Italy $ 373.36 million (up 33.1%), the Netherlands $ 270.14 million (up 56.63%), Belgium $ 214.91 million (up 17.26%), and France $ 152.73 million (up 28.81%).

Textiles and clothing exports to the EU have benefited most through the GSP+ concession, accounting for over 60%, followed by food products with over 12%. Sri Lanka has duty-free access to 7,200 products with the EU GSP+ concession.

The apparel industry has said the EU GSP+ status is important for exports. 

“The value of the apparel exports to the EU is around $ 1 billion. The withdrawal of the status will be a severe loss to the overall exports. I don’t think anyone is willing to bear any additional cost increase of around 12% if we lose the EU GSP+ status at this point of time,” Joint Apparel Association Forum (JAAF) Secretary General Tuli Cooray said soon after the EU vote in June. 

Recently, JAAF expressed optimism over the possibility of securing the industry-critical extension of EU GSP+ program after multiple meetings with the Government, including Minister Namal Rajapaksa, Regional Cooperation State Minister Tharaka Balasuriya and Foreign Secretary Admiral Prof. Jayanath Colombage.

In July, Central Bank Governor Ajith Nivard Cabraal, as the then State Minister of Money and Capital Markets, recalled that in 2010, when the GSP+ was withdrawn, exports to the EU were at $ 2.9 billion. 

“Everyone was concerned that our exports will not survive it and there will be factories closed, job losses and economic crash. But what eventually happened was quite the opposite of their claims. In 2011, with no GSP+, our total exports to the EU were at $ 3.6 billion, up by 20%, and no one speaks about it,” Cabraal noted.