Business

Trade Ministry expects ‘favourable’ decision on GSP+

  • Expresses optimism in retaining the trade concession
  • Says negotiations were ‘successful with no conflict’

 

 

BY Yakuta Dawood

According to the Ministry of Trade, the European Union (EU), a delegation of which was in Sri Lanka for the Generalised Scheme of Preferences Plus (GSP+) monitoring mission, was unlikely to withdraw GSP+ from Sri Lanka, The Sunday Morning Business reliably learns.

Speaking to us, a senior official from the Ministry of Trade, who wished to remain anonymous, stated that negotiations held between the EU delegation during their visit to Colombo and Sri Lankan top officials were successful without any conflict or complexity that could lead to the temporary withdrawal of the GSP+.

“The decision taken by the EU delegation will be most likely favourable to Sri Lanka. Also, the delegation had fruitful discussions with Prime Minister Mahinda Rajapaksa and other top officials without any concerns, which could negatively impact their decisions,” the official said.

Adding, the official stated that the formal announcement by the EU will take time, as the decision will be made after discussions are held between all 27 countries in the EU Federation.

The EU Parliament, earlier this year, called on the Government of Sri Lanka to repeal the Prevention of Terrorism (Temporary Provisions) Act No. 48 of 1979 as amended and the EC to consider the temporary withdrawal of the GSP+ from Sri Lanka if it is not done. Reportedly, the 24th Session of the EU-Sri Lanka Joint Commission in the first quarter of 2022 will witness the review of all aspects of bilateral co-operation.

The GSP+ gives Sri Lanka preferential access to markets in the EU. It was withdrawn in 2010 after the EU identified three major shortcomings concerning the United Nations Human Rights Conventions (the International Covenant on Civil and Political Rights, the Convention against Torture, and the Convention on the Rights of the Child), related to the GSP+ scheme, which is not only a special incentive agreement for sustainable development but also good governance. It has been identified that the GSP+ especially benefits the fisheries and apparel industries.

Meanwhile, the GSP+ provided by Japan for Sri Lanka, which was under review for extension according to the 2020 Annual Report of the Central Bank of Sri Lanka (CBSL), was recently extended for 10 years until 31 March 2031.

Speaking to us, Department of Commerce Director of Commerce Somasena Mahadiulwewa stated that including Sri Lanka, Japan also grants preferential tariff treatments under its new cycle of the GSP to 127 developing countries and five territories.

“After the GSP+ scheme provided by Japan expired on 31 March 2021, it is now extended for 10 years until 2031,” Mahadiulwewa said.

Furthermore, Mahadiulwewa added that in terms of the product coverage, there is not much difference between the new GSP scheme compared to the previous scheme, as only one additional product (plastic facemask) is included for tariff concessions in the new scheme for all beneficiaries.

The GSP was introduced by the General Agreement on Tariffs and Trade (GATT) to grant autonomous trade preferences to all developing countries or least developed countries by the developed countries or the industrialised countries as per the instructions of the United Nations Conference on Trade and Development (UNCTAD).

The GSP facility provided by Japan to Sri Lanka grants preferential tariffs under the Temporary Tariffs Measures Law. The facility was granted from 1 August 1971 onwards.