By Toby Vogel | European Voice
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The suspension, which takes effect on 15 August, is expected to cost Sri Lanka's exporters – primarily in the textile sector – more than €100 million annually in higher import duties. In 2008, Sri Lanka exported goods worth €1.24 billion to the EU under the preferential trade regime known as GSP+.
The economic impact of the suspension will be significant but not crippling, according to sources familiar with the situation. Sri Lanka's industrial exports grew by 0.3% year-on-year in the first quarter of 2010. Overall economic growth was 3.5% in 2009 and is projected to be double that figure this year.
The Sri Lankan government says that many of the improvements demanded by the Commission are being undertaken but that others are “unacceptably intrusive”.
On 17 June, Catherine Ashton, the EU's foreign policy chief, and Karel De Gucht, the European commissioner for trade, wrote to the Sri Lankan government with a list of demands, around half of them relating to implementation of the International Covenant on Civil and Political Rights. The letter suggested that a written commitment by the government to meeting these conditions would prompt the Commission to propose that the trade preferences be maintained.
Strong-arm tactics
The EU's human-rights concerns increased after the government's crushing of Tamil rebels last year, a refugee crisis it triggered, and strong-arm tactics by President Mahinda Rajapaksa in elections in January and April. However, the government relaxed its emergency rule in May and has accelerated the resettlement of Tamil civilians who were displaced in last year's fighting.
In an interview in the Times of India on Monday (28 June), Rajapaksa said that he was “not bothered” by the suspension, calling it “politically motivated”. About the GSP+ status, he said: “If the EU does not want to give it, let them keep it. I do not want it.”
A spokesperson for De Gucht rejected the accusation. “To suggest that any decision by the EU is politically motivated and to link it to the elections of this year is entirely false,” he said.
Ravinatha Aryasinha, Sri Lanka's ambassador to the EU, said the Commission had been “rather clumsy” in dealing with the matter. “It is disappointing and unfortunate because there was a vibrant process of engagement” between the two sides that has now been cut short by the Commission's ultimatum, he said.
The GSP+ gives 16 developing countries access to EU markets with preferential conditions in return for implementing international conventions on human rights, labour standards, sustainable development and good governance.
© European Voice
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