A dive into GSP plus : How SL will regain the concession ?

A dive into GSP plus : How SL will regain the concession ?

Written by Staff Writer

12 Jan, 2017 | 9:40 pm

How will Sri Lanka regain the GSP Plus Concession?And does it involve any conditions?

The EU’s “Generalised Scheme of Preferences” or GSP allows developing countries to pay less or no duties on their exports to the EU and gives them vital access to EU markets and contributes to their economic growth.

The scheme covers around 7200 Sri Lankan products which can enter the EU duty free.

Sri Lanka was awarded GSP Plus following the 2005 Tsunami Devastation. It was awarded for a period of three years which ended in 2008.Thereafter , the EU decided to review Sri Lanka’s progress on 27 UN Charters including Human Rights , Labour Rights , Environment Protection as well as Good Governance, to re-award GSP Plus to Sri Lanka.

The previous government did not support it and the EU, following the review released an interim report followed by a final report and decided to terminate GSP Plus with effect from August 15, 2010.

Deputy Minister of Foreign Affairs Dr. Harsha De Silva commented thus

“… Professor G.L.Peiris received a letter from the European Commission on the 17th of June 2010 noting that GSP Plus Concessions to Sri Lanka end in another six months and called Sri Lanka to act on it. However, they said they do not need it and threw it away. We are once again receiving it after the establishment of Good Governance followed with the 19th Amendment to the constitution, strengthening democracy of the people and several other reasons …”

With incumbent President Maithripala Sirisena coming in to power, a programme was launched to regain the GSP Plus. During his visit to Germany, the President requested German Chancellor Angela Merkel to assist Sri Lanka in regaining the GSP Plus Concessions.

The German Chancellor promised the President that Germany would support Sri Lanka’s request.In the recent time, President Maithripala Sirisena took monumental decisions with regard to many sectors including Human Rights , Labour Rights, Environment Protection and Good Governance.

As a result of this, on  January 12, 2017, the European Commission proposed to restore GSP Plus.

Attorney-at-Law Shiral Lakthilake, Coordinating Secretary to the President says that the EU expects a certain degree of commitment from Sri Lanka with regard to 27 different sectors and some call it as betraying the sovereignty of the nations.

Chairman of the Logistics Sub-Committee of Joint Apparel Association Forum Rohan Masakorala adds that buyers over there experienced a 10 percent price hike in the apparel sector and we lost our competitiveness, market access which directly impacted on our exports.

“… It will be debated in parliament for a month and a half. Regaining GSP Plus is not a dream but is almost a reality. I am pleased to say that. As present if a Sri Lankan good is sold for 100 in their currency, they have to pay 17 % tax. After we obtain this, it will drop to 3 % from the 1st of April. The benefit will reach the producers …”, said Minister of Finance Ravi Karunanayake.

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