Sri Lanka asks EU to extend GSP Plus trade deal

Oct 13, 2008 (LBO) – Sri Lanka’s government has formally applied to the European Union to extend the GSP Plus trade scheme under which the island’s exports gain duty free access, an official said. S Ranugge, secretary to the external trade ministry, said the government expects to know by December 15 whether or not the GSP Plus scheme would be extended.

The application for GSP Plus extension was sent through the foreign affairs ministry to the high commission in Brussels which had submitted it last Friday, he said.

The island’s apparel industry and exporters of a host of other products depend heavily on the duty free access provided under the GSP Plus scheme to sell in EU markets.

Loss of the duty free concession would make Sri Lankan exports uncompetitive against exports of other countries with lower labour, energy and raw material costs.

It would be a critical blow especially to the apparel industry which has seen sales to the United States, the biggest markets, slowing down.

The apparel industry has said it fears the EU might not extend the concession because of concerns over alleged human rights abuses by government forces in their campaign against the Tamil Tigers.