EU Plans Temporarily Stop on Sri Lanka's Duty Free Export Status

BRUSSELS, Belgium – The European Commission has completed a thorough investigation into the human rights situation in Sri Lanka in relation to the country’s duty free export status for bicycles and bicycle parts. Christiane Hohmann, the Commission’s spokesperson for Trade said:

“Sri Lanka is not living up to the commitments it made to respect international human rights standards when it became a beneficiary of the European Union’s General System of Preferences (GSP+) trade incentive scheme which provides for additional trade benefits. We have come to the conclusion that there are significant shortcomings in this area and that Sri Lanka is in breach of its GSP+ commitments.”

The Commission launched this investigation on 14 October 2008 to assess whether the national legislation of Sri Lanka incorporating three UN human rights conventions was effectively implemented. These three conventions, the International Covenant on Civil and Political Rights (ICCPR), the Convention against Torture (CAT) and the Convention on the Rights of the Child (CRC) are among the 27 international conventions that form part of the substantive qualifying criteria for GSP+.

After consulting with member states, the Commission has now adopted a proposal with a view to temporarily suspending these additional trade benefits. The EU Member States will have two months in which to decide on it. In case they decide to temporarily stop the country’s duty free export status it will have severe implications on the bike export from the country to the EU. Sri Lanka is the number 4 bicycle supplier of the EU with a 2008 export of over 700,000 bikes. These bikes were able to enter the European Union without anti-dumping duties and/or import tax.

The Commission also stated: “We are determined to pursue our dialogue with Sri Lanka on the substantive human rights problems identified in the report and the steps that Sri Lanka can take to address them. We want to work constructively with Sri Lanka on this and expect that any actions taken to improve the human rights situation will be suitably vigorous, rapid and verifiable.”

Sri Lanka is a major beneficiary of the trading opportunities offered by GSP+. In 2008, EU imports from Sri Lanka (including bicycles, bicycles parts as well as lots of other products) under GSP+ totalled € 1.24 billion. Any future temporary withdrawal of GSP+ treatment would mean that EU imports from Sri Lanka would instead be subject to standard GSP preferential treatment.