Lanka to receive GSP + concessions for 8 months more

Sri Lankan exporters can enjoy tax-free, GSP Plus concessions to Europe until June 2010 after which, its fate rests on whether there are positive improvements in the country’s human rights situation, the top European Commission (EC)’s official in Colombo said this week.

Explaining the process, after a recent damning report by an EC-appointed panel which pointed to serious flaws in Sri Lanka’s implementation of 27 international conventions, Bernard Savage, the EC’s head of delegation to Sri Lanka and the Maldives, said within a few weeks the EC will submit its recommendations and a roadmap (for implementation by the Sri Lankan Government) to the European Council which will decide two months from then on the next, final steps.

What does the future hold for them?

Six months from that point (till June 2010), the Government has time to show improvements in the concerns raised by the probe panel, before the Council decision becomes effective. He declined to give details of the roadmap. Sources from the garment industry, the biggest beneficiary of GSP Plus, said the roadmap will include a time-line for implementation on a number of issues and enforcement of conventions dealing with human rights, core labour standards, sustainable development and good governance.

Informed that workers would be the ones to suffer if Sri Lanka’s application is refused, raising ethical issues for the EC, Mr. Savage, responding in an interview with the Sunday Times on Thursday, said:
“There are millions of workers whose jobs in the 14 countries (entitled to GSP Plus) depend on these concessions. Our ethical responsibility as far as the workers are concerned goes beyond workers in one country and our responsibility (also) is to maintain the coherency and integrity of the instrument (GSP Plus regulation), because if we don’t, those countries who do not have this concession can point to the commission and say you are not applying your own rules,” he said.

In such a case, the EC Colombo chief argued, the whole instrument and the jobs of workers in the GSP Plus group would be at risk.

“If we don’t apply our own laws, not only will we be failing in our duty and be open to legal challenge in the European Court of Justice but also open to challenge in Geneva at the WTO by those countries who want GSP Plus but didn’t get it for whatever reason. They can point the fingers and say that we are not applying our own rules, that there is no coherency in the application of the eligibility criteria and therefore the instrument is not in conformity with WTO rules, “ he said, adding: “Our ethical responsibility is to the coherency and integrity of the instrument. It is also our legal responsibility.”

Any room for further dialogue (between the EC and Sri Lanka)? “Dialogue is fine but we are (actually) past that stage. The EC needs to see more concrete steps being taken on the serious concerns raised in the report.

Our position is that we want Sri Lanka to retain the GSP+ concessions but in the light of the issues raised, we first need to see some positive action by the Government,” he told the newspaper.

The Government has refused an EU probe saying it’s a violation of the country’s sovereignty, and opted for dialogue to iron out issues raised by the Commission.

The EC Colombo chief rejected the widely-believed view that the Commission’s investigative process was a ‘tit-for-tat’ response to refusal by Sri Lankan authorities to oblige requests from the international community to stop the offensive, during the last stages of fierce battles between Government soldiers and the LTTE before May 2009 when the near 30-year long revolt was crushed.

“This is not a knee jerk reaction to current events. The whole question of the investigation goes back to a number of reports made by UN Rapporteurs in 2007. And the investigation was launched in October 2008 long before the issues (over the war) occurred. The investigative process is definitely not a reactive one,” he said.

This is not the first time the EC has dismissed claims linking the conflict to GSP Plus. In February 2008, long before the war ended, the then EC ambassador Julian Wilson said the ongoing internal conflict will not affect the investigation. “This is simply a matter of 27 conventions. It is not related to the issue of the conflict. It depends on the ratification and effective implementation of the conventions. The war and other internal matters are not an issue here,” Mr Wilson was quoted as saying in a report in the Sunday Times on February 17, 2008 during a presentation to the Sri Lanka-Canada Business Council.

Mr Wilson said the EU is not using GSP Plus as a political tool. “We have a commercial relationship with Sri Lanka that spans 300 years. This is not to be thrown out on a whim. So the entire exercise will be undertaken with absolute professionalism. There will be no political games,” said Wilson.

This week, Mr.Savage reiterated that position saying the GSP Plus issue (even if Sri Lanka doesn’t get it) won’t affect any current or future relations between the two sides. “Our relations are broader than just GSP Plus. A few weeks ago I inaugurated the EC-funded school at Vakarai in Batticaloa in the presence of the President. That’s the extent of our relationship. I hope in the next weeks and months we will inaugurate a project in Matara. We also have many developments projects in the North and the East, some ongoing, the others about to start. None of this would be affected,” he said.

An EC report made public last week criticized the Government on issues relating to the failure of enforcing the rule of law, unlawful killings and arbitrary detentions. "There have been a significant number of disappearances which are attributable to State agents or paramilitary factions’ complicity with the Government," said the report. "Hence Sri Lanka has failed to implement its obligation to prevent disappearances by State agents and other forces for which it is responsible." The report added that serious restrictions have been placed on freedom of movement for people displaced by bloody battles between Government forces and Tamil rebels while scores of journalists have been subjected to physical violence.

Sri Lanka is the only country in Asia and one of 14 countries in the world that enjoys this special status with the EU in which more than 7,200 products categories are allowed duty-free into the EU. It is also one of two countries, the other being El Salvador, where an investigation is on as a precursor to approving a second round of concessions.

The second round of benefits runs from January 2009 to December 2011, and if Sri Lanka fails to win Council support, it will only lose these benefits for half or 18 months of the 3-years scheme. The Central Bank on Thursday, in a risk management analysis, told reporters that there would be little impact on the garment industry if Sri Lanka’s application is refused.

Mr Savage said Sri Lanka has time till November 6, which was an extended deadline requested by the Government from the earlier deadline of October 26, to respond to the EC report. “So far there hasn’t been a response,” he said.

“I hope we can get to a stage where the Commission’s recommendations on GSP Plus is positive. Diplomatic relations – let me put it this way –is not a football match. There are no winners or losers. Unfairness, punishment doesn’t come into the picture. We are on a long term relationship. That doesn’t mean we always see eye to eye,” he added.

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