NO GSP PLUS to SRI LANKA – EU

Failing to respond to the conditions laid down by the commission, ended in loosing the GSP trade concessions for Sri Lanka as of August 2010, The European Union officially announced. The British clothing retailer, NEXT, has already stopped sourcing its garments from Sri Lanka, last week, because of the uncertainty of the continuance of the GSP+ duty concession from the European Union. NEXT is a British retailer, with its headquarters in England., and it is one of the United Kingdom’s largest clothing retailers, number three behind Marks & Spencer and Philip Green’s retail empire of Bhs and Arcadia Group.

The company has moved production to Bangladesh. Meanwhile, exports to the EU fell 13% in the first quarter of 2010, a decline the Sri Lankan garment industry attributes to falling demand due to the economic conditions there. Garments are Sri Lanka’s largest foreign exchange earner. The GSP+ facility helps Sri Lanka to export garments and several other products to the EU on a duty free basis. The advantage o exporters is 9%. The EU last month again threatened to stop this concession by August 15 if Sri Lanka doesn’t give a written guarantee by July 1 to some 15 conditions governing human rights, the deadline of which is now past.

According to the Central Bank, garments exports to EU countries constituted about 50 per cent of Sri Lanka’s total apparel exports in 2009. Of these, about 60 per cent benefited from the GSP+ scheme, while the balance was exported to the EU without the GSP+ concession.

“We very much regret the choice of Sri Lanka not to take up an offer made in good faith and in line with the EU commitment to a global human rights agenda. We will however keep the door open for Sri Lanka to return to talks,” Catherine Ashton of the EU said in a statement today. “Our precedent-setting offer sought to recognise some tangible progress yielded during these last months of dialogue,” added EU Commissioner Karel De Gucht. “We hope that these results, however partial, will be sustained, in line with the incentivising characteristics of GSP+.”