Brussels has consistently warned Sri Lanka that it must meet 27 international human rights conventions to retain its Generalised System of Preference Plus trade scheme. Suspending the preferential tariffs would hit Sri Lanka’s textile industry hard and many fear big job cuts as a result.
In 2008, the European Union was Sri Lanka’s largest export market, accounting for 36 percent of all exports, followed by the United States with 24 percent. Garments earned the country a record $3.47 billion from EU markets and were its top source of foreign exchange, followed by remittances of $3 billion and tea exports of $1.2 billion.
The Commission will discuss Monday’s report and decide by the end of November whether to propose to EU member states that they temporarily suspend Sri Lanka’s GSP Plus status. A decision would likely take effect around June next year, six months from a vote by member states, a Commission official said.
Major European importers, notably large British retailers such as Marks & Spencer (MKS.L: Quote, Profile, Research), are concerned about possible increases in the cost of buying from one of their major suppliers amid the worst economic downturn in decades.
Colombo came under heavy pressure from Western nations, including those in Europe with large Tamil populations, because of civilian deaths in the final phase of the war against the Tigers, which ended with the separatists’ defeat in May.
The Sri Lankan government has repeatedly accused European countries with large and vocal Tamil populations of pandering to pro-Tamil Tiger viewpoints in exchange for electoral support. Last year, it said it would neither cooperate with the EU investigation nor allow investigators to visit the island.
(For updates you can share with your friends, follow TNN on Facebook and Twitter )