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EU Temporarily Withdraws GSP-Plus Benefits From Sri Lanka

Wednesday, February 17, 2010

The European Union (EU) Member States have decided to withdraw temporarily, and with effect in six months' time, Generalized System of Preferences Plus (GSP+) preferential tariff benefits to Sri Lanka, following an exhaustive investigation by the European Commission (EC).

Under GSP+, the EU provides additional preferences – beyond standard GSP treatment – to economically vulnerable developing countries which have ratified and effectively implemented 27 international conventions in the fields of human and labor rights, sustainable development, and good governance.

The GSP+ tariff preferences, which take the form of duty-free access, cover roughly 6,400 tariff lines. Sri Lanka’s GSP+ preferences had been renewed, late in 2008, for a further three-year period from January 1, 2009 to December 31, 2011.

In an EU press release, it was said that the EC investigation had identified significant shortcomings in respect of Sri Lanka’s implementation of three of those conventions. However, as the suspension of GSP+ benefits will only take effect in six months' time, Sri Lanka is being given extra time to address the problems identified.

Should the country fail to address these problems before the six months have elapsed, however, Sri Lankan exports will revert to standard GSP preferences. These preferences, it was said, will still be more generous for key Sri Lankan exports, such as clothing, than those provided by other major developed countries.

EU Trade Commissioner, Karel De Gucht, stated: "I would like to emphasize that I hope Sri Lanka will sit with us over the next six months in order to agree upon a set of measures that will result in rapid, demonstrable and sustainable progress in relation to the human rights shortcomings we have identified."

The press release confirmed that the EU remains open to a full dialogue with the government of Sri Lanka, above all to encourage it to take the necessary steps towards an effective implementation of GSP+ relevant human rights conventions. The EU will closely monitor and regularly re-evaluate developments in this area. If and when sufficient progress is made, it is proposed that GSP+ benefits should be restored.