By Darren Ennis - A European Union probe has found Sri Lanka in breach of international human rights laws, meaning the South Asian country is likely to lose concessions worth over $100 million for its top exports to Europe, EU sources said.
Brussels is expected to publish on Monday the findings of its investigation into Sri Lanka launched a year ago to probe allegations of human rights violations and torture, stemming from a 25-year war with Tamil Tiger rebels.
"The assessment report says Sri Lanka does not fulfil the requirements of GSP plus," one EU source said on Friday in reference to the system of preferential tariffs for the world's poorest countries.
"The evidence is very clear that Sri Lanka does not fulfil the basic human rights conditions of GSP plus," the source said, citing the report.
Brussels has consistently warned Sri Lanka it must meet 27 international human rights conventions to retain its Generalised System of Preference Plus trade scheme.
"GSP plus is not an instrument used for short-term political crisis, but is meant to provide long-term stability," a European Commission official said.
"This is not a trade sanction. There are rules for GSP plus and if you break the rules, then unfortunately there are consequences. They will keep basic GSP either way."
Colombo came under heavy pressure from Western nations, including those in Europe with large Tamil populations, because of civilian deaths in the final phase of the war against the Tigers, which ended with the separatists' defeat in May.
Last year, the government said it would not cooperate with the European Union's investigation nor allow investigators to come to the island nation.
EU sources said the report shows evidence of police violence, torture and breaches of labour laws, notably the use of underage children.
SUSPENSION WOULD HIT TEXTILES HARD
In 2008, the European Union was Sri Lanka's largest export market, accounting for 36 percent of all exports, followed by the United States with 24 percent.
Suspending the preferential tariffs -- which can go as low as zero -- would hit Sri Lanka's lucrative textile industry hard.
Garments netted the country a record $3.47 billion from EU markets last year, and were the country's top source of foreign exchange, followed by remittances of $3 billion and tea exports of $1.2 billion.
Many fear the loss of the trade terms would force job cuts from a workforce of a million people, most from poor rural areas.
Major European importers, notably large British retailers such as Marks & Spencer, are concerned about possible increases in the cost of importing from one of their major hubs in the midst of the worst economic downturn in decades.
Monday's report will be discussed by the EU's executive European Commission -- which oversees trade policy for the 27-nation bloc -- who must then decide by the end of November whether to propose to member states to temporarily suspend Sri Lanka's GSP plus status.
Any decision would take effect six months from the vote by EU member states.
"It would most likely take effect around June next year," a Commission official said.
© Reuters
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