The European Union (EU) on Monday announced that Sri Lanka would temporarily lose its General Services Preferential (GSP) + tariff concessions, mainly to the apparel sector, from August 15 following the decision of the island nation to reject a conditional offer by the Union.
The EU had set July 1 as the deadline for Sri Lanka to accept 15 specific conditions to be fulfilled within a time-frame of six months.
Colombo rejected the offer saying it amounted to interference in the internal affairs of the country and asserted it was not prepared to barter its sovereignty for the sake of EU concessions to the tune of $150 million.
In a statement issued from Brussels, the EU said the decision to withdraw GSP+ had been taken by the Council of Ministers in February 2010. However, based on dialogue with Sri Lankan authorities, the EU in June offered to delay acting on the decision by a further six months. In exchange, it asked for “tangible and sustainable progress” on a number of outstanding issues and in the absence of a reply from the authorities in Colombo by July 1, the Commission said it was not in a position to propose delaying the Council decision.
“We very much regret the choice of Sri Lanka not to take up an offer made in good faith and in line with the EU commitment to a global human rights agenda. We will however keep the door open for Sri Lanka to return to talks,” said EU foreign affairs head Catherine Ashton.
Within days of the EU announcing the July 1 deadline for conditional extension of the GSP + concessions, the United States announced it would review workers rights related trade concessions granted to island nation under its Generalised System of Preferences (GSP).
The U.S. said the review does not mean it had made up its mind to withdraw the concessions. The Central Bank of Sri Lanka, in a statement, said the economy was ready to the face the situation arising out of the withdrawal of EU concessions from August 15.
