Sri Lanka To Regain EU Duty Free Import Status in 2017
COLOMBO, Sri Lanka – The European Union noted the progress made by Sri Lanka on the criteria for regaining its so-called GSP+ import duty free status for bicycles imported into the European Union. The GSP+ status safes bicycle exporters from Sri Lanka 14% EU import duty. In 2017 Sri Lanka is expected to again be granted this special status which made the country 5 years ago EU’s 3rd biggest bike supplying country.
In August 2010, Sri Lanka lost its GSP+ status as a result of alleged violation of human rights. In that year the country exported 1.2 million bicycles to the EU member states with special trade preferences granted to the country under EU’s Generalizes System of Preferences (GSP). In 2010 Sri Lanka was, after Taiwan and Thailand, EU’s 3rd biggest bike supplier. Since losing the GSP+ status the bicycle export from the country dropped hard; to only a quarter of a million units during the first 8 months of 2015.
With the election of a new government Sri Lanka is applying for reinstatement of the tariff preferences provided under the special incentive arrangement for sustainable development and good governance (GSP+) of the European Union.
The European Commissioner for International Cooperation and Development, Neven Mimica, acknowledged last week in Colombo that, “It is visible that democracy and reconciliation are top priorities of the newly elected government. So now is the correct time and it is the common will of the EU to grant this.” However, he also said that it is the Sri Lanka government’s decision when to apply for the GSP+ trade benefit from the European Union.
“We will work together for an early application. The approval process takes about 10 – 12 months. The process is on track and a meeting will take place in April when a delegation from the EU comes.” EU Commissioner Mimica said this at the ceremonial inauguration of the delegation premises of the European Union to Sri Lanka and the Maldives.
Imports from Sri Lanka crumbled
Europe is Sri Lanka’s biggest export market with textile and clothing accounting for more than half of the export value. In 2010, bicycle imports reached a record high of 1.2 million units. As a result of duties going from 0 to 10.5%, after lifting GSP+, EU imports from Sri Lanka dropped to 950,000 bikes in 2012. The year after however, imports crumbled to under 400,000 as a result of the imposition of a 48.5% anti-circumvention duty. Three companies, i.e. Asiabike, BSH Ventures and Samson Bikes were excluded from the duties. They will more than probably welcome the 10.5% duty reduction once GSP+ becomes effective again in Sri Lanka.