The European Commission has adopted a proposal to temporarily suspend the GSP+ trade concession to Sri Lanka. EU Member States will now have two months to decide whether to remove GSP+ benefits permanently or not.
What is GSP+?
GSP+ is a special incentive arrangement which offers additional tariff reductions to support vulnerable developing countries. However, GSP+ requires those countries to ratify and implement 27 international agreements and covenants (ranging from human rights protection to ratifying the Kyoto environment protocol).
Why has the EU suspended Sri Lanka from GSP+?
The European Commission has concluded that Sri Lanka is in breach of its GSP+ obligations with regards to human rights, in particular:
The International Covenant on Civil and Political Rights
The Convention against Torture and;
The Convention on the Rights of the Child.
How will this affect Sri Lanka?
In 2008, EU imports from Sri Lanka under GSP+ totalled EUR 1.24 billion. The most important products that benefitted from these arrangements were t-shirts and other clothing articles as well as fisheries products. Any future withdrawal of GSP+ treatment would mean that EU imports from Sri Lanka would instead be subject to standard GSP preference. The impact of the withdrawal of GSP+ can be seen in the fact that had GSP+ not applied to imports in 2008, an additional EUR 78 million in import duties would have been collected.
What Next?
EU Member States have two months to decide whether or not to suspend GSP+ indefinitely or not to Sri Lanka. The Commission has insisted however, that it will maintain its dialogue with Sri Lanka in order that this measure is only a temporary one.
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