Close on the heels of the European Union's decision to withdraw preferential tariff concessions to Sri Lanka's apparel industry, the United States has announced that it will review workers rights related trade concessions granted to the island nation under its Generalised System of Preferences (GSP).
The EU's decision could result in loss of $150 million and is based on its report about the perceived failure of Sri Lanka to conform to international conventions on human rights.
The U.S. move is based on a petition seeking review of trade tariff concessions linked to workers rights.
The U.S. has made it known that the decision to review does not mean it has made up its mind to withdraw the concessions. The EU last week had set July 1 as the deadline for an undertaking from the Sri Lankan government committing to fulfill 15 conditions, including release of all LTTE suspects under the military's custody.
Colombo rejected the offer saying it amounted to interference in the internal affairs of the country and said it was not prepared to barter its sovereignty for the sake of concessions.
The Central Bank of Sri Lanka (CBSL), in a statement, said the economy was geared up to the meet the situation arising out of the withdrawal of EU concessions from August 1.
“While the prevailing crisis in some of the economies in the EU region has added to the difficulty of continuation of such concessions by the EU, the CBSL has regularly cautioned all stakeholders about the inherent uncertainties surrounding the continuation of the GSP+ facility, and advised all to prepare for the inevitability of the discontinuation of the scheme,” said the statement.
A statement from the U.S. embassy in Colombo said that under the American GSP system, preferential duty-free treatment was given for over 3,400 products from 131 designated countries, including Sri Lanka.
“Products covered under the GSP programme include: machinery, electrical goods, chemical products, agricultural products, jewellery and much more,” said the statement. “Most textiles and apparel are not eligible for preferential benefits under the programme.”
It said that the American Federation of Labour and Congress of Industrial Organizations (AFL-CIO), an American trade union, had petitioned against the concessions in 2008 asking for a review of worker rights in Sri Lanka. The U.S. had decided to accept the petition for a review.
The statement said countries must ensure that internationally recognised worker rights, including the right of association, right to organise and bargain collectively, and a prohibition of compulsory labour was in place to quality for GSP benefits.
Other criteria included measures against child labour, and occupational safety and health, work hours, minimum wages and working conditions.
The statement said there would be a public hearing, likely to be held in August to discuss the worker rights issues raised by the AFL-CIO petition and the government of Sri Lanka will be invited to participate in the hearing. Before the hearing, the United States and Sri Lankan government will engage in a dialogue on any areas of concern with respect to worker rights.
