Sri Lanka defiantly refused to allow a European Union (EU) investigation into rights abuses callit an "infringement of Sri Lanka's sovereignty, self respect and dignity', and announced plans to support the garment industry financially if existing trade concessions are not renewed by EU.
The EU recently warned it may not renew the GSP Plus (Generalised System of Preferences) trade scheme after it expires in December because of continuing human rights abuses stemming from
The EU had asked to send an investigating team to ensure
"What the cabinet has decided is not to agree with investigations that are required by the EU to renew GSP Plus," Minister of Export Development and International Trade G.L. Peiris told reporters at a press conference held on Monday, October 20, at the Central Bank to brief the media on the GSP Plus Scheme.
According to the minister, the Government will not betray
"The Cabinet has decided to reject the investigation and we have instructed our Ambassador in
Many in the island's garment and textile industry, which employs hundreds of thousands of mostly rural poor, fear a downturn if the special trade terms are axed.
However Peiris said the effect would be limited.
"We only get $150 million from GSP Plus. We are not ready to betray our country through this investigating," Pieris said.
"We should not betray our dignity and respect for US$ 150 million. We have to develop our strength and resources. In every sense we have capabilities to fulfil our task.”
At the same press conference, Ajith Nivard Cabraal, Governor of the Central Bank of
"The government has decided to provide a subsidy equal to the total GSP Plus concession of $150 million to the garment industry," Cabraal told reporters.
GSP Plus benefits
GSP Plus is an EU trade concession that has helped
The trade scheme helped
Garments last year were the country's top source of foreign exchange followed by remittances of $2.5 billion and tea export earnings, which brought in $1 billion.
Around US$ 1.4 billion of this was apparels, of which the majority was exported under the GSP. In other words, apparels sector is the biggest beneficiary of the GSP, though other sectors like fisheries and industrial products also use the facility. Assuming that the tax concession granted was around 10% across the board - the EU has said it’s between eight and 18 per cent - the benefit accrued by the apparel industry is roughly around US$ 150 million. The amount
The proposed EU probe is widely seen by political analysts as a tool to get the government to address alleged human rights abuses and lack of humanitarian help for thousands of civilians stranded in northern
In July, the EU said
Rights groups have reported hundreds of abductions, disappearances and killings blamed on government security forces and Tamil Tiger rebels since a ceasefire in the 25-year-old civil war evaporated in 2006.
The situation worsened last month when all international humanitarian agencies were ordered to leave the area. Only government supplies through local level officials are going through for thousands of people who have been displaced.
“We are following closely
“According to the GSP Regulation, if information received by the Commission points to possible non compliance with the GSP Plus criteria and gives sufficient ground for an investigation, the Commission shall initiate such an investigation and publish a notice announcing it. The Commission notifies the beneficiary country concerned.”
“If the country concerned does not cooperate, the Commission still has to continue the investigation and make the findings on the basis of the facts available. During the investigation the Commission invites all interested parties to make their views known in writing and provides the country under investigation with every opportunity to cooperate in the investigation.”
“The new GSP Regulation 2009-2011 envisages that a country under a GSP Plus investigation continues to benefit from the GSP Plus prefrences until the date of conclusion of such investigation. The final decision on the eligibility of a country under investigation for the GSP Plus 2009-2011 is suspended until the end of the investigation.”
Neil Kearney, general secretary of the Brussels-based International Textiles Garments and Leather Workers' Federation (ITGLWF), while visiting
"The EU will want to assess how far
He further added it was unfortunate that 'statements' (at that time) by some Sri Lankan ministers, that the country would not accept a EU mission to study these aspects, and that Sri Lanka prefers to lose the concessions rather than allow such a mission, complicated matters.
"I find this extremely shortsighted as a halt to these concessions would affect thousands of workers and their dependants. Workers in the transport, logistics and support services in the industry will be affected,"
Last month, Foreign Minister Rohitha Bogollagama told Benita Ferrero-Waldner, European Commissioner for External Relations, in
He insisted that government’s response to any proposed EU action on extending GSP Plus will take into consideration “the country’s national priorities and interests which are protection of the territorial integrity and fight against separatism, eradication of terrorism, restoring democracy and empowering the people”.
Earlier this month, Sri Lanka’s Ambassador to Brussels Ravinatha Ariyasinghe lashed out at Member of the European Parliament Robert Evans (from UK) after he presented a report on Sri Lanka that Ariyasinghe said was “replete with unsubstantiated allegations, deliberate distortions and blatant falsehoods.” The document had been prepared after a July visit to
This personal attack came after Benita Ferrero-Waldner released an open letter to Sri Lankan media rejecting personal attacks against the EC’s former Head of Delegation in Colombo Ambassador Julian Wilson. Ferrero-Waldner has repeatedly made strong statements about the situation in
Garment industry concerned
Despite the bravado, the impact on
Whilst the Sri Lankan government is unconcerned, the garment industry is worried.
Trade unions have said the absence of EU trade concessions could impact thousands of garment workers and their families.
Anton Marcus, general secretary of the Free Trade Zones and General Services Employees' Union, said that if
"Many factories will close down," he said.
Joint Apparel Association Forum (JAAF) officials say they are hopeful the rescue package of 150 million dollars will act as a buffer against any fallout on industries that benefit from the EU concessions.
“The government doesn’t want to compromise
“Still, there’s a question of how the government will provide these benefits. Is it by waiving off the electricity cost of garment factories, or some such thing? Besides, where will the money come from?”