Sri Lanka has been knocking on the door for some time now, but it was learnt that the country has to fulfill certain requirements to be fully entitled to the GSP Plus. It was also learnt that several key members of the European Union have expressed their support to Sri Lanka and has vowed to aid in achieving the said concessions.

From the perspective of developing countries as a group, GSP programmes have been a mixed success. On one hand, rich countries have complied with the obligation to generalise their programmes by offering benefits to a large swath of beneficiaries, generally including nearly every non-OECD member state. Certainly, every GSP programme imposes some restrictions. The United States, for instance, has excluded countries from GSP coverage for reasons such as being communist being placed on the U.S. State Department’s list of countries that support terrorism and failing to respect U.S. intellectual property laws.

Speaking on the matter, Minister of Finance Ravi Karunanayake told The Sunday Leader in January 2016 that the initial groundwork for gaining GSP plus has been laid by the new government and that they are forwarding the first application to the European Union by next March. He also stated that a second application will be forwarded to the EU and that this application will be the most crucial one.

Blunting competition

Although the government announced it was on track in obtaining the Generalised Scheme of Preferences (GSP) special incentive arrangement (GSP+) of the European Union lost during the Rajapaksa regime, it is learnt that any tangible steps are yet to be taken, The Sunday Leader reported earlier. (See http://www.thesundayleader.lk/2016/05/08/sri-lanka-on-track-in-regaining-gsp-plus-govt/)

It is learnt that although the urgency of obtaining the facility was reportedly discussed at length at a recent Cabinet meeting, no final decision was taken.

The Ministry of Foreign Affairs recently announced that the government had agreed with the European Union (EU) to implement a list of 58 conditions linking human rights, national security and other domestic concerns with trade. Among the 58 conditions imposed are to revoke the Prevention of Terrorism Act, to expedite cases of remaining detainees, to introduce a new Human Rights Action Plan, review the status of the Tamil Diaspora organisations and individuals on the terrorist list, to devolve power under the new Constitution, return all private lands to owners in the North, adopt a policy of National Reconciliation and on National Resettlement, finalise the re-settlement of all displaced persons, and to ratify the Convention on Enforced Disappearances with accompanying legislation as well as issue certificates of absence.

Although some might perceive Sri Lanka to be ‘slow’, the government is on track in regaining the GSP Plus Scheme lost during the Rajapaksa regime, State Minister of International Trade Sujeewa Senasinghe said recently (See http://www.thesundayleader.lk/2016/05/08/sri-lanka-on-track-in-regaining-gsp-plus-govt/).

Rectifications

Sri Lanka lost the GSP Plus in 2010 due to the Mahinda Rajapaksa government not co-operating with the UN by not allowing foreign investigators to ascertain the situation in the country and not following several UN international conventions.

Following the above circumstances, the new government under President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe will certainly have their hands full in regaining the GSP Plus. Also, the visit of United Nations (UN) High Commissioner for Human Rights Prince Zeid Al-Hussein to Sri Lanka next month will be one of the most crucial checkpoints for the GSP Plus.

Therefore the government will be aiming to fulfill required necessities and achieving the target of export growth through the European Union’s GSP Plus. Under the current economic framework and the political situation of the country, it seems timely for Sri Lanka to divert from the traditional mindset and capitalise on GSP Plus and other bilateral trade relations with much stronger economies.

Bilateral trade between Sri Lanka and the EU exceeded $ 5.07 billion, increasing 3.6% Year-on-Year (YoY) of which 69% consisted of Sri Lankan exports to the EU. The majority of Sri Lankan exports to the region was made up of apparel, which was valued at $ 2.16 billion in 2014, recording growth of 10.5% YoY, followed by rubber tyres and tubes which generated $ 208 million and finally frozen fish exports which reached $90 million.

(By Wiraj Silva – thesundayleader.lk)