At a time when Sri Lanka faces the possible danger of losing its GSP Plus concession, economic experts warn that having to pay duty will make the country less competitive in the International market.
Economists have sounded alarm bells as the European Parliament dropped a bombshell last week on the likelihood of Sri Lanka losing its GSP Plus concession. On June 10, a resolution was adopted by the European Parliament urging the European Commission to temporarily withdraw Sri Lanka’s GSP+ status.
As Sri Lanka is experiencing a three-week lockdown following a third wave of the pandemic, the apparel industry was one among a few essential services that was allowed to function.
Textile exports accounted for 1.08 billion Euros, but recording a sharp drop from 1.2 billion Euros in 2019.
Plastics and rubber exports accounted for 239 million Euros while the food and machinery industries recorded exports amounting to more than 100 million Euros.
Currently, Sri Lanka enjoys the GSP+ facility granted by the EU. This means Sri Lankan products are exempted from taxes in the European market.
The GSP+ facility was removed for Sri Lanka in 2010, before being granted in 2017, under certain conditions.
The EU said it would monitor Sri Lanka’s moves to amend the Prevention of Terrorism Act and the implementation of five conventions.
But now, the EU parliament has adopted a resolution seeking to consider the temporary withdrawal of Sri Lanka’s GSP+ status.
The resolution notes that Sri Lanka has excessively applied the Prevention of Terrorism Act, without adhering to international human rights principles.
Att.-at-Law Dr. Gehan Gunatilleke, a former foreign ministry advisor opines that the PTA can be amended without delays.
“…the Port City Bill. It’s a very complicated bill. But ultimately, they got it through very fast. This means, if they want to do something, they can do it,” he said during News1st’s Newsline show.
The GSP+ scheme currently offered to eight countries including Sri Lanka will be valid until December 2023.