Update on Sri Lanka’s Export Duty Free Status
On November 5 Bike Europe reported that Sri Lanka is about to lose its duty free export status for Europe per end of this year. A measure with big implications as the country is the number 4 bicycle supplier of the EU with a 2008 export of over 700,000 bikes. On November 20 it was reported that
BRUSSELS, Belgium – On November 5 Bike Europe reported that Sri Lanka is about to lose its duty free export status for Europe per end of this year. A measure with big implications as the country is the number 4 bicycle supplier of the EU with a 2008 export of over 700,000 bikes.
On November 20 it was reported that Sri Lanka still has a chance to extend its duty free export status that comes with the European Generalised System of Preferences. This trade agreements grants developing countries reduced import duties. Sri Lanka is enjoying a complete exemption of duties for its export into the EU as it has committed itself to 27 conventions in the field of human and labour rights, sustainable development and good governance. As a result the export of bicycles, parts and accessories have free of charge entry into the EU.
A November 20 report published by the mobile news service of the UK newspaper Daily Mirror states that: “Sri Lanka will have the GSP plus trade concession at least until mid 2010 and stands a chance of continuing with the special incentive arrangement if it takes appropriate measures to address concerns raised in an EU report submitted recently, the European Commission (EC) said.”
The discussion on Sri Lanka’s duty free export status for Europe started with the country’s government refusing entry into the country of an EU investigation team that wanted to examine human rights violations and the deaths of thousands of Tamils during the war with Tamil Tiger rebels. This urged the European Commission to state that it would consult member states on suspending the trade benefit. Also the EU made it clear to the Sri Lanka’s government that the GSP Plus status would not be extended beyond 2009 if its concerns were not addressed.
The situation didn’t go unnoticed in the UK where retailers are urging the EU on caution over GSP for Sri Lanka. They are calling on the European Commission not to penalise Sri Lankan workers or British shoppers in a human rights row. The British Retail Consortium has warned a threat to remove special tax-free arrangements for cheap, good-quality clothes imported from Sri Lanka could hit flourishing businesses and jobs in the country and put up customer prices. A European Commission spokesman said: “Questions remain over the degree of effective implementation of certain UN human rights conventions in the country.”