EU May Halt Sri Lanka GSP

The European Union planned to withdraw preferential trade benefits to Sri Lanka because of concerns about the south Asian island's human rights record.

The European Commission, which oversees the 27-nation bloc's trade policy, said an investigation had revealed significant shortcomings in Sri Lanka's implementation of three UN human rights conventions linked to preferential trade tariffs.

The trade benefits, worth about 100 million euros ($136.1 million) a year to Sri Lanka, will be withdrawn in six months' time unless EU concerns are addressed.

Sri Lanka benefits from concession in the EU's Generalised System of Preferences Plus (GSP+), an incentive scheme tied to the improvement of human rights and good governance.

The country came under pressure last year from Western nations, including those in Europe with large Tamil populations, because of civilian deaths in the final phase of the war against the Tamil Tigers, which ended with the separatists' defeat.

Suspension of the preferential tariffs could hit Sri Lanka's booming textile industry hard. The country earned a record $3.47 billion from exports of clothing to EU markets in 2008, the largest source of its foreign currency earnings.

 

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