Columns -Thoughts from London

Missing the bus on our GSP Plus

By Neville de Silva

In the next day or two-if it has not already happened by the time this column appears-the European Union would formally inform Sri Lanka that it will launch an inquiry into the country’s compliance with the criteria required to extend the GSP Plus trade concession which we have enjoyed for the last three years.
There may be some who would object to the use of the word “concession” arguing perhaps that it is Sri Lanka’s entitlement. Before one proceeds further it would be useful to remind ourselves that what has come to be known as GSP Plus was extended to Sri Lanka following a ruling of the World Trade Organisation. That ruling related to an objection raised by India that granting a concession to one particular country-apparently Pakistan-discriminates against some other countries and so it came to be extended to Sri Lanka and to several other countries especially in south and central America.

Quibbling over semantics- whether this is a concession or not- has only stultified debate and prevented a discussion of the nub of this issue. Moreover a discussion of the key components of this trade issue from which Sri Lanka has benefited considerably as the garment industry which is the main beneficiary would testify, has been further confused by other concerns which to my mind at least appear extraneous to the debate. It seems to have caused some to lose sight of the wood for the trees.

It has been said that for the EU to institute an investigation into Sri Lanka’s compliance with criteria that need to be satisfied for extending the GSP Plus for another three years, is an infringement of the country’s sovereignty, an interference in its internal affairs and shows disrespect. Whether this is genuine confusion, misplaced patriotism or merely a pro forma exercise in raising the flag as some political parties have done, is for the public to judge. In the hope of clearing some of the fog that seems to envelop this debate I will cite rather extensively from the European Union legislation that governs this particular aspect of trade. Even if it does not change the views of those whose minds seem to be as permanently set as concrete, I hope that what follows will help focus the debate more on the substance of the case rather than be distracted by issues of sovereignty and interference.The first important fact is that Sri Lanka applied to the EU asking for GSP Plus. The EU did not come running after Sri Lanka pleading with Colombo to accept this preferential handout. If Sri Lanka is the applicant then like any applicant to join an organization or even a club, it must accept the rules of that organization which lays down the rights of members, how they should conduct themselves and the consequences of their violation. The EU legislation concerning GSP does precisely that. It states in Article 9 subsection 1 (b) that the “special incentive shall be granted if an examination of the request shows that the requesting country or territory fulfils the conditions laid down in Art 1 & 2.”

What does Art 1 say? That the beneficiary country “gives an undertaking to maintain the ratification of the conventions and their implementing legislation and measures and accepts regular monitoring and review of its implementation record in accordance with the implementation provisions of the conventions it has ratified.” Clearly Sri Lanka is a beneficiary country as the government itself has stated. The withdrawal of that status would mean direct or indirect job losses for several hundred thousand and the duty free entry of some 700- odd products, mainly garments, to the EU countries. Obviously Sri Lanka gave the necessary undertakings when it first applied for GSP Plus. Otherwise it would not have been granted it. That is not all. Equally importantly Colombo agreed to “regular monitoring and review of its implementation record.”It surely means that Sri Lanka was aware beforehand- that is before it made its first application-that its record concerning the implementation of certain international conventions would be investigated. If such an investigation was deemed an infringement of sovereignty and an interference in its affairs, why did Sri Lanka make the application in the first place? Some might argue that this was before the current government was in power or had just assumed office and so was not aware of the implications of applying for the EU concession. If one concedes that for the sake of argument, then the inevitable question that flows from it is why Sri Lanka has applied for a three-year extension now knowing only too well what that entails?

What then was the undertaking that was first given and is ready to give again by requesting an extension of GSP Plus? The Council Regulation (EC) No 732/2008 sets out clearly what is expected of the beneficiary countries and what the European Commission has to consider and how it should act. In its preamble the Council Regulation says that additional tariff preferences should be granted, among other matters, to those developing countries that ratify and effectively implement “core international conventions” on human and labour rights and others. In Section 11 of the preamble it says that the “Commission should monitor the effective implementation of the international conventions in accordance with their respective mechanisms……” In short there is a duty cast by EU law on the Commission to monitor the implementation of those core conventions which are set out in Annex 111 and include the International Convention on Civil and Political Rights, the Convention on Elimination of All Forms of Racial Discrimination, Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment and the Convention on the Rights of the Child.

Art 8 (3) of the Regulation states that the “Commission shall keep under review the status of ratification and effective implementation of the conventions listed in Annex 111 by examining the available information from relevant monitoring bodies. The Commission shall inform the Council if this information indicates that there has been a diversion, by a beneficiary country, from the effective implementation of any of the conventions.”

There is no ambiguity in that. The Commission has the right to review how those conventions are being implemented on the ground. To do so it will seek information from the monitoring bodies and the Commission is duty bound to inform the Council of any lapse by the beneficiary country. All this is known or should be known to every applicant for preferential treatment. It should also be known that reasons for the withdrawal of the concession “should include serious and systematic violations of the principles laid down in certain international conventions concerning human rights and labour rights……”

It is not labour rights or environmental issues that seem to concern the EU but issues relating to the effective implementation of conventions relating to human rights, convention on torture and convention on the rights of the child that include child soldiers. In seeking information on these issues the Commission will turn to the monitoring bodies which mean UN bodies such as the Human Rights Committee and committees dealing with torture and children.

There is a feeling however that by sometimes conducting a policy of abrasive diplomacy Sri Lanka has antagonized some of the UN bodies and accused high ranking UN officials of nefarious activities which will not help. As a friend said the other day if you go to a bank for a loan and the bank wants to inquire into your credit worthiness, you cannot tell the bank that it is private matter and an unacceptable interference. Well you could, if you don’t want the loan. But you cannot justifiably ask the bank for a loan and tell the bank it cannot do its legitimate job.

There is a simple lesson. If you want to move the goal posts don’t play football.

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