Sri Lankan exporters brace for life without EU tax breaks

DANKOTUWA, August 15, 2010 (AFP) – Sri Lankan exporters braced for hard times as the EU’s withdrawal of import concessions took effect Sunday after Colombo’s refusal to allow scrutiny of its human rights record. Sri Lanka has long been a preferred source for top high streets brands and its garment, china and other exports enjoyed lower European Union tariffs under a concession known as the Generalised System of Preference Plus (GSP+).

But when the concession came up for renewal last year, Sri Lanka’s hawkish government refused EU demands for a probe into war crimes allegedly committed in 2009 during the last months of the country’s ethnic civil war.

“We are heading into difficult, uncertain times with the end to the concessions,” Sunil Wijesinghe, who heads Japanese-owned Dankotuwa Porcelain in the village of Dankotuwa, north of Colombo, told AFP.

Business executives said they understood EU concerns, but warned that cancelling tax breaks that gave Sri Lanka preferential access to the vast European market in return for commitments on social and rights issues would achieve little.

If the EU’s objective is to improve human rights, the withdrawal of tax breaks “is not going to make it better