Business

Exporters worry GSP+ will be ‘executed’ with death penalty

Sri Lanka’s exporters await with bated breath to see if President Maithripala Sirisena walks back on his decision to end the moratorium on the death penalty in Sri Lanka, as it now appears that it may come at the cost of the Generalised Scheme of Preferences Plus (GSP+) trade facility.

This has become a major concern following a statement issued last week. The European Union (EU) said it “will continue to monitor Sri Lanka’s effective implementation of the 27 international conventions relating to the Generalised Scheme of Preferences Plus (GSP+) commitment, including the International Covenant on Civil and Political Rights”, according to the statement.

The President’s decision has come under the spotlight for international condemnation, including by countries Canada and Switzerland as well as Amnesty International and UK billionaire Richard Branson.

Speaking to The Sunday Morning Business, National Chamber of Exporters (NCE) Secretary General/CEO Shiham Marikar said the loss of GSP+ would have a massive impact on Sri Lankan exporters.

“We cannot make any statements with regard to the death penalty. However, once we lost the GSP+ facility and had to face a huge battle to regain it. Therefore, losing it again would make things very difficult for Sri Lankan exporters because Europe is one of their main export markets. GSP+ is not a facility given on a platter; we need to earn it, and since our request fulfilled, there was an improvement in Sri Lankan exports. So, if there is any threat to the GSP+, I think the Government should discuss this matter and ensure it is unaffected.”
While Sri Lanka enjoys GSP+ now, it would be revoked once the country advances to an upper middle-income economy status as classified by the World Bank and remain within that classification for three years. However, there is likely to be a grace period of around two years.

Marikar said that irrespective of how long Sri Lanka could enjoy the preferential trade position, it is important that the country continues to benefit from it until it’s naturally revoked.

“Even if we are to lose it in two or three years’ time, these three years with the GSP+ will be a major contribution to the country’s export sector,” he stated.
He added that if we were to lose GSP+, the Government and private sector would have to work together to mitigate the negative impact through alternative methods.

GSP+ allows eligible developing countries to pay fewer or no duties on exports to the EU. It is part of the EU’s wider GSP scheme but offers additional trade incentives, from which Sri Lanka benefits immensely, particularly with its apparel exports to the EU.