Sri Lanka moved close to regaining GSP + trade concessions on Thursday when the European parliament defeated a crucial vote on a resolution seeking to block it, with a vast majority.
A 52 member parliamentary group moved the motion last week and it was defeated with 436 MEPs voting against the resolution and 119 supporting it. This group objected to the EU Commission’s recommendation giving the go ahead to grant this rare preferential status to Sri Lanka, citing lack of progress on the Human Rights commitments.
The Deputy Foreign Affairs Minister Dr.Harsha de Silva speaking to media on Friday, hours after returning from Brussels said, the biggest hurdle to regain GSP + was removed when the vote was tilted in favour of Sri Lanka. He was, together with Sri Lanka’s Ambassador in Brussels Rodney Perera, canvassing for Sri Lanka’s interests in the EU capital before the crucial vote.
The Deputy Minister said, with only procedural matters left to be sorted out, he expected Sri Lanka to regain the trade concession by May 15, the latest. Once the trade concession is restored, over 1,000 Lankan products qualify for tax free export to the world’s biggest market. A total of 6,600 products are exempted from duty under GSP + concessions.
He said, with the GSP + concessions there was a complete removal of 9% -10% in duty for Lankan exports to all 28 countries in the EU.
The Minister said, the GSP + should be made a platform for a Trade agreement with the European Union and he will raise the matter with the Prime Minister, shortly.
Head of Trade in the EU Delegation Colombo, Paul Godfrey told the Sunday Observer, the period for lodging objections to the EU Commission’s recommendation will expire on May 11. Therefore, he said, ‘theoretically, the parliament can still make objections to Sri Lanka’s bid for GSP + status, although it was highly unlikely’.
After this hurdle, Sri Lanka’s application will be referred to the EU Council of Ministers comprising 28 Trade Ministers of the member states where it can still be shot down.
He said, GSP + concessions support Human Rights and Labour standards as a global basis. Low income countries automatically have access to EU trade relief while the lower middle income countries, to which category Sri Lanka belongs, must qualify for it.
Once Sri Lanka becomes an upper middle income country, it will no longer qualify to enjoy the concessions.
Head of Trade Godfrey said, ‘If Sri Lanka maintains the current economic growth, the country will graduate to upper middle income level by 2019.’
Once it attains this status, the EU will grant a three year grace period. Thus, ‘the country can safely enjoy exclusive GSP+ concessions up to 2021 if it succeeds this year in regaining the tariff relief,” he said.
If the application is somehow unsuccessful , the country can re-apply but the process, which takes 8 to 12 months has to resume from scratch.
Sri Lanka formally applied for the GSP+ in June last year setting off an intense evaluation process on good governance and human rights indicators, with a technical team arriving in Colombo last year to monitor compliance.
On January 11, 2017 the executive body of the EU, the EU Commission concluded that ‘Sri Lanka meets the eligibility criteria of Article 9(1) of the GSP Regulation’.
The GSP plus concession which was withdrawn from Sri Lanka in 2010 due to the country’s poor human rights record, had resulted in a loss of 150-200 million Euros in the country’s exports, the Deputy Minister said.