April 28, 2008 (LBO) – A dispute over Sri Lanka’s duty free access to key European markets has snowballed into a political hot potato with exporters alarmed that remarks by the country’s central bank governor could prompt buyers to look elsewhere. Governor Ajith Nivard Cabraal’s comment that market access under the GSP+ scheme was a subsidy that exporters could do without has created much uncertainty, export industry officials said.
“The implications are enormous, if we lose GSP +,” said an official representing an export trade association who declined to be identified for fear of being politically victimised.
“Without the GSP+ concession Sri Lankan exporters would have to add 12-18 percent import duty on to the cost of an export unit.
“That would make us uncompetitive against rival exporting countries which have trade agreements giving them duty free market access.”
The European Union has said it may not renew Sri Lanka’s market access under the GSP+ scheme unless the government improves its human rights laws under the commitment of International Covenant of Civil and Political Rights (ICCPR).
The government says human rights protection is already available under existing laws.
Government forces have also been accus