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Sri Lanka says likely to lose EU trade concession

[AFP, Tuesday, 1 September 2009 18:56 No Comment]

Sri Lanka is likely to lose a lucrative European Union trade concession for its top export, garments, based on the initial findings of an EU probe into its human rights record, a senior government official said.

S. Ranugge, secretary in Sri Lanka’s Export Development and International Trade Ministry, said a preliminary report received a week ago highlights allegations of human rights violations and torture, stemming from a 25-year war with Tamil Tiger rebels.

Garments netted Sri Lanka a record $3.47 billion from EU markets last year, and were the country’s top source of foreign exchange, followed by remittances of $3 billion and tea exports of $1.2 billion.

Since July 2008, the European bloc has warned Sri Lanka it may not meet the human rights standards required for access to the Generalised System of Preference Plus trade scheme, based on reports of human rights abuses in the final phase of the war.

"The report is very adverse and GSP Plus is very unlikely," Ranugge, who is the trade ministry’s top civil servant, told Reuters. "If the report is favourable, you can keep hope. The reaction of the EU is not that favourable."

The EU ambassador to Sri Lanka, Bernard Savage, declined to comment on the initial findings made by experts contracted to carry out the probe, but confirmed a report had been prepared.

"The full text of that has been made available to the Sri Lankan authorities. Once we have gathered all the reactions, particularly those of the Sri Lankan government, the report will be finalised within a short time," Savage told Reuters.

Sri Lanka came under heavy pressure from Western nations, including European ones 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 on May 18.

In October, the government said it would not cooperate with the European Union’s investigation nor allow investigators to come to the island nation. Sri Lanka estimates the loss of the concession will cost it about $150 million a year.

The EU’s official decision is expected by October and the $40 billion economy will be entitled to the trade benefits for six months thereafter, Ranugge said. The final decision is non-appealable.

In 2008, the European Union was the largest export market for Sri Lanka, accounting for 36 percent of all exports, followed by the United States with 24 percent in 2008.

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