Sri Lanka’s garment industry is worried that the duty free access it enjoys to European markets will soon be cut due to the gross human rights violations related to the government’s pursuit of a military solution to the long-standing ethnic conflict.
An end to European Union (EU) trade concessions, known as Generalised System of Preferences Plus (GSP+), according to some estimates, will result in the direct loss of at least a 100,000 jobs in the pivotal garment industry and many more, indirectly.
The GSP+ scheme allows duty free exports of almost all major Sri Lankan products, into the EU, but the garment industry has been the main beneficiary, which generates an annual revenue of $1.6 billion per year.
Concessions linked to human rights record
The existing concession comes up for review in later this year, in October and earlier this year a visiting EU delegation linked trade concessions to human rights record and said that the extension of the GSP+ concessions for Sri Lanka were yet to be considered.
The EU has indicated that continuance of the GSP+ depends on how well the Sri Lankan government is seen to be implementing 27 international conventions on human rights, labour rights and environmental standards.
"It is totally based on fulfilling these conventions. This (current review) is a technical exercise on compliance with these conventions. This means not just having the laws, but also implementing them," said Julian Wilson, head of the European Commission (EC) delegation to Sri Lanka.
The EU has been severely critical of the government’s human rights record. There is fear that such issues as the harassment of journalists and rising political abductions, could be used as a reason to discontinue the GSP+ scheme.
As one of the four Co-Chairs of the 2003 Tokyo Conference on the Reconstruction and Development of Sri Lanka, the EU helped raise pledges for post-conflict rehabilitation and development worth 4.5 billion US dollars -- but this was tied to progress in the peace process.
Wilson denied that the EU is using the GSP+ as a political tool. "We have a commercial relationship with Sri Lanka that spans 300 years. This is not to be thrown out on a whim. So the entire exercise will be undertaken with absolute professionalism. There will be no political games.’’
Government action
“The extension of the GSP Plus scheme appears to be an uphill task since Sri Lanka did not fully satisfy the conditions set out by the EU such as Human Rights, good governance and environment,” according to Chairman of Sri Lanka Apparel Institute, Professor Lakdas Fernando.
Whilst the garment industry is fearful of an end to concessions, the Sri Lankan president Mahinda Rajapakse is less worried and has taken the view that compliance with international human rights laws could lead to infringement of sovreighnity.
Speaking at the launch of the Central Bank Annual Report 2007 the President insisted that although the government is taking every possible measure to receive the GSP+ concessions, compromising the sovereignty of the country is not one of its principles.
“If the influences of the treacherous parties in the country succeed and the European Union rejects the concessions. Our private sector should be able to increase their productivity and face these external challenges as well”.
However, worried about the prospect of losing the concessions, last month, the government appointed a four-member ministerial team to work with the garment industry and dispel some of the concerns raised by the EU.
In mid-March, trade minister Prof. G.L. Peiris led delegation to Europe for a series of meetings, including one with Benita Ferrero-Waldner, European Commissioner for External Relations and European Neighbourhood Policy, Benita Ferrero-Waldner, on the issue.
According to reports, Ferrero-Waldner, indicated to Pieris in no uncertain terms that Sri Lanka would qualify for GSP plus benefits only if the human rights record was put in order.
She was also rather critical of the ongoing ethnic war and even told the Minister that; “the war will never solve any problem in Sri Lanka.”
In January, the government unilaterally ended a Norwegian-brokered ceasefire accord with the Liberation Tigers of Tamil Eelam (LTTE) and embarked on a military campaign to defeat the LTTE.
According to Sri Lankan media, even as Peiris returned to the country after a failed mission in Brussels to convince the EU officials of Sri Lanka’s compliance to human rights laws and good governance, Governor of the Central Bank of Sri Lanka, Ajith Nivard Cabraal told the BBC that the GSP+ facility was not really necessary.
He not only dismissed the concessions as disposable but also said he had personally advised the government the concessions were not essential to the garment industry.
Non-compliance
In 2005 when GSP+ came up for renewal, Sri Lanka made a plea for extension on compassionate grounds as the country had been badly hit by the December 2004 tsunami and was also recovering from the end of garment quotas offered by the United States.
Under the original agreement between the EU and the government in 2003, Sri Lanka was obliged to 'ratify and fully implement' a set of 27 international conventions including the International Covenant on Civil and Political Rights (ICCPR).
While most or all of these convenants were ratified by Colombo, far ahead of countries like China or India, it's the implementation that concerns workers. "Yes we have ratified these covenants but the implementation is the problem," Anton Marcus, general secretary of the Free Trade Zones and General Services Employees' Union said.
Union Support
Last month, the government gained unexpected support from local trade unions, which once said that employers and government violated core labour conventions and therefore should not be benefit from the GSP+.
"They don't comply by the labour standards but if Sri Lanka loses the GSP+ the impact will be on the workers. So we do not want to see the GSP+ being taken away. But we do want some indication that core labour standards will be adhered to," said Marcus, last month.
Marcus said the labour groups met a EU delegation visiting Colombo last month and said that they would back the government request for an extension of the special concession if the roadmap is implemented and international trade unions are also appointed as monitors in this process.
"We have no problem in supporting this as long as the workers get their rights," he said, adding that one of the issues in the roadmap is the right to freedom of association and collective bargaining.
"This is a key element in the core labour standards agreed by the government in 2003 to the EU which is yet to be implemented," Marcus said.
US concerns
Last week, U.S. Ambassador Robert Blake told a meeting of the garment trade, that while Sri Lanka is trying to convince U.S. policy makers to give preferential trade treatment, on the grounds of being a vulnerable economy and on the basis of ethical manufacturing standards, the country's negative human rights image 'eclipsed' everything else.
The U.S. is the biggest market for Sri Lanka’s garment industry which expects to bring in three billion US dollars this year.
Escape again
Whilst Sri Lanka continues to commit gross human rights violation, it may, as in the past, yet again escape from any punitive measures or sanctions by the international community.
According to local media, Roshan Lyman, EU Economic and Trade Advisor in Sri Lanka, has sent out an optimistic note to the country, informing that Sri Lanka still has plenty of opportunities to improve her human rights situation.
“We have to first do an evaluation of all the applications and that will start only in October. Certainly, Sri Lanka has time till October”
“We have a legal department in Brussels and only when they get all the documents for evaluation, the department will release its final results. And this will be on December 15, or so. It is after December 15 that the legal department of the EU will give out the list of countries that qualify for GSP plus benefits,” he has said.
An end to European Union (EU) trade concessions, known as Generalised System of Preferences Plus (GSP+), according to some estimates, will result in the direct loss of at least a 100,000 jobs in the pivotal garment industry and many more, indirectly.
The GSP+ scheme allows duty free exports of almost all major Sri Lankan products, into the EU, but the garment industry has been the main beneficiary, which generates an annual revenue of $1.6 billion per year.
Concessions linked to human rights record
The existing concession comes up for review in later this year, in October and earlier this year a visiting EU delegation linked trade concessions to human rights record and said that the extension of the GSP+ concessions for Sri Lanka were yet to be considered.
The EU has indicated that continuance of the GSP+ depends on how well the Sri Lankan government is seen to be implementing 27 international conventions on human rights, labour rights and environmental standards.
"It is totally based on fulfilling these conventions. This (current review) is a technical exercise on compliance with these conventions. This means not just having the laws, but also implementing them," said Julian Wilson, head of the European Commission (EC) delegation to Sri Lanka.
The EU has been severely critical of the government’s human rights record. There is fear that such issues as the harassment of journalists and rising political abductions, could be used as a reason to discontinue the GSP+ scheme.
As one of the four Co-Chairs of the 2003 Tokyo Conference on the Reconstruction and Development of Sri Lanka, the EU helped raise pledges for post-conflict rehabilitation and development worth 4.5 billion US dollars -- but this was tied to progress in the peace process.
Wilson denied that the EU is using the GSP+ as a political tool. "We have a commercial relationship with Sri Lanka that spans 300 years. This is not to be thrown out on a whim. So the entire exercise will be undertaken with absolute professionalism. There will be no political games.’’
Government action
“The extension of the GSP Plus scheme appears to be an uphill task since Sri Lanka did not fully satisfy the conditions set out by the EU such as Human Rights, good governance and environment,” according to Chairman of Sri Lanka Apparel Institute, Professor Lakdas Fernando.
Whilst the garment industry is fearful of an end to concessions, the Sri Lankan president Mahinda Rajapakse is less worried and has taken the view that compliance with international human rights laws could lead to infringement of sovreighnity.
Speaking at the launch of the Central Bank Annual Report 2007 the President insisted that although the government is taking every possible measure to receive the GSP+ concessions, compromising the sovereignty of the country is not one of its principles.
“If the influences of the treacherous parties in the country succeed and the European Union rejects the concessions. Our private sector should be able to increase their productivity and face these external challenges as well”.
However, worried about the prospect of losing the concessions, last month, the government appointed a four-member ministerial team to work with the garment industry and dispel some of the concerns raised by the EU.
In mid-March, trade minister Prof. G.L. Peiris led delegation to Europe for a series of meetings, including one with Benita Ferrero-Waldner, European Commissioner for External Relations and European Neighbourhood Policy, Benita Ferrero-Waldner, on the issue.
According to reports, Ferrero-Waldner, indicated to Pieris in no uncertain terms that Sri Lanka would qualify for GSP plus benefits only if the human rights record was put in order.
She was also rather critical of the ongoing ethnic war and even told the Minister that; “the war will never solve any problem in Sri Lanka.”
In January, the government unilaterally ended a Norwegian-brokered ceasefire accord with the Liberation Tigers of Tamil Eelam (LTTE) and embarked on a military campaign to defeat the LTTE.
According to Sri Lankan media, even as Peiris returned to the country after a failed mission in Brussels to convince the EU officials of Sri Lanka’s compliance to human rights laws and good governance, Governor of the Central Bank of Sri Lanka, Ajith Nivard Cabraal told the BBC that the GSP+ facility was not really necessary.
He not only dismissed the concessions as disposable but also said he had personally advised the government the concessions were not essential to the garment industry.
Non-compliance
In 2005 when GSP+ came up for renewal, Sri Lanka made a plea for extension on compassionate grounds as the country had been badly hit by the December 2004 tsunami and was also recovering from the end of garment quotas offered by the United States.
Under the original agreement between the EU and the government in 2003, Sri Lanka was obliged to 'ratify and fully implement' a set of 27 international conventions including the International Covenant on Civil and Political Rights (ICCPR).
While most or all of these convenants were ratified by Colombo, far ahead of countries like China or India, it's the implementation that concerns workers. "Yes we have ratified these covenants but the implementation is the problem," Anton Marcus, general secretary of the Free Trade Zones and General Services Employees' Union said.
Union Support
Last month, the government gained unexpected support from local trade unions, which once said that employers and government violated core labour conventions and therefore should not be benefit from the GSP+.
"They don't comply by the labour standards but if Sri Lanka loses the GSP+ the impact will be on the workers. So we do not want to see the GSP+ being taken away. But we do want some indication that core labour standards will be adhered to," said Marcus, last month.
Marcus said the labour groups met a EU delegation visiting Colombo last month and said that they would back the government request for an extension of the special concession if the roadmap is implemented and international trade unions are also appointed as monitors in this process.
"We have no problem in supporting this as long as the workers get their rights," he said, adding that one of the issues in the roadmap is the right to freedom of association and collective bargaining.
"This is a key element in the core labour standards agreed by the government in 2003 to the EU which is yet to be implemented," Marcus said.
US concerns
Last week, U.S. Ambassador Robert Blake told a meeting of the garment trade, that while Sri Lanka is trying to convince U.S. policy makers to give preferential trade treatment, on the grounds of being a vulnerable economy and on the basis of ethical manufacturing standards, the country's negative human rights image 'eclipsed' everything else.
The U.S. is the biggest market for Sri Lanka’s garment industry which expects to bring in three billion US dollars this year.
Escape again
Whilst Sri Lanka continues to commit gross human rights violation, it may, as in the past, yet again escape from any punitive measures or sanctions by the international community.
According to local media, Roshan Lyman, EU Economic and Trade Advisor in Sri Lanka, has sent out an optimistic note to the country, informing that Sri Lanka still has plenty of opportunities to improve her human rights situation.
“We have to first do an evaluation of all the applications and that will start only in October. Certainly, Sri Lanka has time till October”
“We have a legal department in Brussels and only when they get all the documents for evaluation, the department will release its final results. And this will be on December 15, or so. It is after December 15 that the legal department of the EU will give out the list of countries that qualify for GSP plus benefits,” he has said.
