EU Ambassador Savage confirms commitment to dialog with Sri Lanka on GSP

EU Ambassador Savage confirms commitment to dialog with Sri Lanka on GSP

The head of the European Union (EU) delegation to Sri Lanka, ambassador Bernard Savage, said this week that the EU is committed to pursuing a dialogue with the Sri Lankan authorities to ensure the continuation of its GSP+ trade scheme.

His comments follow the EU's decision this week to temporarily suspend Sr Lanka's preferential trade terms because of its poor human-rights record.

Prior to the suspension coming into force during the next six to eight months, Sri Lanka and the EU will address the reasons for suspension of the GSP+. 

"We are committed to pursuing a dialogue with the government of Sri Lanka on the GSP+," said Ambassador Savage at a press conference on the Lisbon Treaty. 

"We are talking of a period of 6-8 months when the GSP+ benefits will not be withdrawn. During this period we will pursue a dialogue with the government to allow the Commission to review its decision to suspend the GSP+, before the suspension comes into force."

Human rights action plan
While there is no official word from the Government at this point, it has indicated willingness to cooperate with the EU on retaining the scheme.  

Last week addressing an award ceremony of the Ceylon Chamber of Commerce, the Minister of Disaster Management and Human Rights, Mahinda Samarasinghe, said the Government was developing an action plan for the protection of human rights. 

The Minister said the action plan - due to be made public soon - is also expected to help retain the GSP+ trade scheme.

"We also hope that this initiative will provide part of the contextual backdrop within which concessions such as GSP+ can be negotiated and secured," said the minister.

Supplier anxiety
Meanwhile, Sri Lankan garment exporters are watching the situation anxiously.  Exporters say some international buyers of Sri Lankan garments are already asking local factories to absorb the loss of the GSP+. 

"Some buyers have already asked our factories to absorb the additional duty cost, but some have agreed to spilt it, so that both parties will absorb the added duty cost," said Rohan Masakorala, the secretary general of the Joint Apparel Association Forum (JAAF).

"Either way, this is going to very difficult for our companies to do because they are not operating with large profit margins, especially the SME's," he added.

While apparel exporters already have orders at least for the first part of 2010, uncertainty applies to the latter part of 2010 and beyond.