The Sri Lankan government is putting its weight behind an appeal to extend the EU GSP+ trade concession for another three years. But, faced with increasing allegations of human rights violations and rising civilian casualties of war, there are concerns that the country - and its garment makers - will lose out, as Dilshani Samaraweera reports.

The GSP+ is a unilateral trade concession scheme from the European Union (EU) to Sri Lanka that allows Sri Lanka to export around 7,200 items to the EU, duty free.

Its most outstanding benefit has been to the local garment industry. The scheme allows Sri Lankan garment manufacturers to remain cost competitive in European markets because of the zero duty export facility.

In 2007 the GSP+ is given most of the credit for the impressive 22% growth in exports of clothing from Sri Lanka to the EU.

GSP+ review worries
The entire GSP scheme (including the GSP+ scheme), extended by the EU to developing countries, is reviewed every three years and 2008 is the review year.

However, there is concern in Sri Lanka that the scheme may not be extended beyond 2008.

This is because the GSP+ was given to Sri Lanka as a reward for impressive labour, environmental and human rights standards, for a developing country.

So the worry is that the increasing international publicity on human rights violations could convince the EU to stop extending the GSP+ for Sri Lanka.
If the EU decides not to extend the GSP+ the loss would be felt across the economy - particularly as the US economy, the next biggest buyer of Sri Lankan goods, is showing signs of slowing.

So the government of Sri Lanka is taking the GSP+ review very seriously.

Government action
Earlier this month the President appointed a four minister contingent to defend the GSP+.

This includes the Minister of Export Promotion and International Trade, Minister GL Peiris, the Minister of Enterprise Development and Investment Promotion, Sarath Amunugama, Minister of Foreign Affairs, Rohitha Bogollagama and Minister of Disaster Management and Human Rights, Mahinda Samarasinghe.

Minister GL Peiris also said the government had "started dialogue" with individual member countries of the EU to drum up support to extend the GSP+ for Sri Lanka beyond 2008.

The Secretary to the Ministry of Foreign Affairs, Palitha Kohona, said the dates for the GSP+ review would be fixed within the year.

"The dates for the review would be fixed on mutual convenience sometime this year. There would be an exchange of calls and letters and both sides would agree on a convenient date," said Kohona.

Kohona dismissed fears of the GSP+ not being continued after 2008 because of allegations of human rights violations.

"That is a very superficial argument, because there is no country in the world where all these standards (human right, labour, etc) are implemented meticulously. Not even the European countries have implemented these standards to the dot."

Kohona said that violations of international standards have occurred in Europe and have been reported to the Human Right Committee in Geneva (now defunct) and the European Council of Human Rights.

Therefore, said Kohona, to expect Sri Lanka to implement all ratified international standards to the letter would be unreasonable.

European interest
To keep the GSP+ with Sri Lanka, the government would argue that extending the GSP+ is in the best interest of European liberal policy.

"The GSP+ concessions were given to Sri Lanka following the tsunami. The major objective was to facilitate speedy recovery.

"So our argument is that the GSP+ has achieved this objective and has benefited Sri Lanka enormously, and not just by benefiting big businesses but also small businesses and workers.

"If you go into European supermarkets today you will find many items from Sri Lanka that were not there a few years ago. Much of this can be attributed to the GSP+," said Kohona.

"So we will try to convince the Europeans that the benefits extended have achieved their objectives and therefore, it is the interest of European liberal policy to continue the GSP+ for Sri Lanka."

Even local trade unions are backing the GSP+ extension, despite earlier arguments that both the government and employers violate labour rights and therefore should not be given the GSP+.

"They don't comply by the labour standards but if Sri Lanka loses the GSP+ the impact will be on the workers," said general secretary of the Free Trade Zones and General Services Employees' Union, Anton Marcus.

"So we do not want to see the GSP+ being taken away. But we want some indication that core labour standards will be adhered to."