Sri Lankan Prime Minister Ranil Wickremesinghe has assured that the country will regain the GSP plus trade concession from the European Union. His assurance came after a meeting local and foreign garment industry officials at his official residence Temple Trees on August 11.
The Generalised Scheme of Preferences (GSP) Plus had helped the garment industry, Sri Lanka’s second biggest foreign exchange earner after remittances, to benefit substantially with a 6-7 per cent concession.
Industry players have estimated the benefit to be in the range of above $ 500 million annually.
Wickremesinghe ‘s optimism was echoed by another minister. “We are very, very hopeful that, within a matter of months, Sri Lanka will be able to get GSP Plus back,” Harsha De Silva, deputy economic development minister, told reporters. He said the concession would benefit those exporting to the EU by at least 12 per cent.
“No fresh conditions have been made. We have been working very closely with the EU.”
Exporters have also agreed to raise wages of their employees and increase their EPF and ETF contributions needed for the return of GSP plus.
Responding to a question about higher salaries in Sri Lanka’s export industry in comparison to countries like Bangladesh and Vietnam possibly dissuading potential investors, De Silva said that this was a myth and that, in fact, salaries in the country needed to be increased.
Sri Lanka lost the EU concession in 2010 after then-president Mahinda Rajapaksa rejected demands from the international community to address human rights abuses allegedly committed during a 2009 offensive to crush the Tamil insurgency. (SH)