23 September, 2020

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Restoration Of GSP Plus To Sri Lanka

By Mahinda Rajapaksa

Mahinda Rajapaksa

The European Union restored GSP+ to Sri Lanka on 19 May 2017. The EU has three GSP schemes. The GSP scheme for the least developed countries with a per capita income below USD 1,025 provides zero duty access to the EU market. The ‘general GSP’ scheme for lower-middle income countries with a per capita income between USD 1,025 and USD 4,035 allows access the EU market on payment of a concessionary import duty. These two EU-GSP schemes have undoubtedly helped many developing countries to build export industries. The EU’s GSP+ scheme allows lower-middle income countries which would normally be charged a concessionary import duty, to enjoy zero duty access to the EU market – but at a heavy price. Applicants for GSP+ must ratify 27 international conventions and place themselves under the political supervision of the EU. As a result, only nine countries including Sri Lanka have joined the GSP+ scheme.

Fulfilling the conditions to qualify for GSP+ could cause permanent damage to a country’s political, legal and institutional framework, which is why my government allowed GSP+ to be withdrawn in 2010 without agreeing to the political demands the EU made for the continuation of GSP+ such as instituting war crimes inquiries against our armed forces and greater devolution of power. After we lost GSP+ in 2010, we came under the general GSP scheme and our exports were charged a concessionary rate of duty by the EU. Since GSP+ was restored to Sri Lanka last month, the government has said that there will be a boom in exports of everything ranging from fisheries products to apparel and other industrial goods to Europe. Hopes have been generated of foreign investors flocking to Sri Lanka to make use of duty free access to the EU market. The government keeps telling the people that our entire future can be built upon GSP+. However, it should be understood that GSP+ offers only temporary economic benefits.

The EU’s GSP schemes are governed by Regulation No: 978/2012 of the European Parliament and the Council of 25 October 2012. A country can benefit from GSP+ only so long as it is a lower-middle income country with a per capita income less than USD 4,035. Upper-middle income countries above that threshold are not entitled to any EU-GSP scheme at all, and goods from such countries are charged the full import duty by the EU. Sri Lanka’s per capita income was USD 3,843 in 2015 and USD 3,835 in 2016 which means that we are just USD 200 away from  the threshold of USD 4,035 which will make us ineligible for any kind of EU-GSP scheme. How close are to that threshold can be gauged from the fact that during my nine years in office, our per capita income grew by an average of USD 286 per year. After Sri Lanka reaches the USD 4,035 mark in a particular year, we will be under observation for a further two years and then given a grace period of about one year before being taken out of all EU-GSP schemes.

Georgia, which used to be a GSP+ recipient, crossed the USD 4,035 threshold and was declared ineligible for both the general GSP and GSP+ schemes by the EU with effect from 1 January 2017 by EU Commission Delegated Regulation No: 2015/1979 of 28 August 2015. The EU-GSP schemes were always designed to take a country gradually from zero duty to paying a concessionary duty and later to paying the full duty. Zero duty access or concessionary duty access under the EU’s GSP schemes was never meant to be perpetual. Countries lose GSP concessions as their economies grow. At times such concessions can be withdrawn by the donor countries for other reasons as well. In 2005, the quota system for apparel imports into the USA which countries like Sri Lanka relied on heavily, was abolished. Yet our apparel exports to the USA continued to grow. Our export industries have certain marketable strengths such as the absence of child labour, adherence to high environmental standards and comparatively good working conditions for employees. Buyers can thus rely on getting an untainted product from Sri Lanka.

Since we are very close to the USD 4,035 per capita threshold, we should prepare for a future without any GSP concessions from the EU, by building on the strengths we already have. Ironically, the transition to a future where we will have to pay the full import duty to the EU would have been easier if we had simply remained within the ‘general GSP’ scheme paying a concessionary duty until we cross the USD 4,035 mark. It should be borne in mind that because GSP+ was restored to Sri Lanka, once we cross the USD 4,035 mark, we will have to make a sudden transition from enjoying zero duty status to paying the full import duty. The government should inform the people and the export industries that we are on the verge of losing not only the recently restored GSP+ but the ‘general GSP’ concession that we had since 2010 as well.  

The government should not create unrealistic expectations about GSP+ among the public. Programmes should be started to help businesses prepare for the inevitable transition to a future without any EU trade concessions, through the diversification of products and markets. Providing low interest capital to modernize factories, tax incentives for expansion, upgrading the skills of the labour force may be some of the measures needed to facilitate this transition. It is hoped the government will give due consideration to these matters.

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Latest comments

  • 24
    24

    We all know exatctly for what reasons EU stop GSP+ to Srilanka. It is not you withdrawn from GSP+.
    It was stopped because you completely destroyed the true democracy in Srilanka. You murdered the freedom of speech, you destroyed the freedom of judiciary, and you became another power greedy monster. You massacred thousands.

    • 21
      7

      Kappan karyo government servant. there is no need to play a repeating record. Don’t distress yourself for the dead. MR1 has displayed the facts and as to how a proud and independent human has to live. His economic policies were better than the present lot that you scum voted for – Sobita the terrorist.

    • 11
      1

      “” You murdered the freedom of speech, you destroyed the freedom of judiciary, and you became another power greedy monster. You massacred thousands.””
      Your elk pulled the gun on Alfred Duraiappa and hell broke lose on the rest of the island and world. You figured heaven is a small place so the wide world supported the massacre like hiroshima and nagasaki.
      Ajith the catholic crusader of the north Singapore is a police state as that is the language the people understand not the western piracy built on crusades of catholic/christian and muslim.

  • 19
    21

    why do you give your name to what other people write

    • 12
      12

      That has been his nature from the day one.

      Even as a minister of Finance for 10 long years, if one would raise him a simple question, the good former would not be able to express facts about anything.
      Mostly he mixes up millions with billions and vice versa.

      This has been typical to MR administration.

    • 9
      0

      because both are patchwork languages. He lived with GSP+ and minus so it’s his experience at the highest which every person who has self respect must respect. anything else.?

    • 8
      1

      nalmen, “why do you give your name to what other people write”
      …………………..Still waters run deep! Computer Programmers still come 2 for a dime but few can make that billion dollar game that the Chinese buy………………….What the numerous LTTE placard holders at cricket grounds, megastore retail garment outlets at EU and America could not achieve he gave it the umph. That is what matters to a leader though he has his own follies.

  • 18
    8

    Sour grapes from former Mafia King.

    Who would consider his thoughts today ? GSP plus is permitted after having proper investigations on the improvement made on HUMAN RIGHTS IN THE COUNTRY after former Mafia King was chased away from lanken leadership.
    EU rules and regulations are held highly strict – is known to almost everyone but obviously not to former Mafia king.

  • 13
    2

    Hey, Leelawathi, what former Mafia King, still he is the Don and King of the Mafia. 99% of the troubles in the country before and now are these mafosis’ works to stay in or gain power at any cost. Hardly the grass eating leaders and people are taking note of these troubles rousings of these mafosis.

  • 11
    9

    Mahinda Rajapaksa,

    Spot on! Everything you did/do is right anything the government does is wrong. I like your simple logic; easy to understand.

    • 10
      3

      what kind of logic ?

      Looting to the core and leave the state in hard up levels ?

      Last week prez Obama was on a visit to Germany- Germans and Europeans gave him a welcome no second to a superstar. On the very same day, Clown incumbent prez arrived in Brussels. Every leader of each of the country got hurt just being unable to get on with the estranged Trump. But Prez Obama had not droped a single word against the current man- since both are from USA. Current man is a joker to everyone in Europe by today – nevertheless OBAMA behaved very professional during his short visit. That is how the educated cultured leaders behave.
      This example proves that the civlized leaders behave collevetively even if the leaderships would have been changed. That is way to go.

      But in srilanka, devious Rajaakshe travels across the globe since he got defeated by very same people – NOT being able to digest the defeat yet- even if it is now over 2.5 years since the abusive Rajakashe is removed from his zimbabwian style tyranny.

      If I were president, I would have found all the sources of MR – and expose the world the ground realities of the abusive man.

    • 6
      3

      Nimal Frenando, you should be uttering the kind of gabage from your back end.
      Else, nobody would ever add the kind all what MR did was right.
      To this date, almost everyone is becoming clear, man et al only looted it to the core.
      How come Srilanken became so non-profit running airline from billion profit maker in 2005. His brother in law and other goons should have eaten the airline out to all high levels. Youshould have been one another to have lived on perks offered to you but unncessarily.

      • 5
        8

        bunjappu, …………. How ungrateful and shallow can you be not to see the attributes of a great leader like Mahinda? He had the intelligence to foresee the floods of 2017 and the foresight to divert Tsunami aid and keep it safe for flood relief in 2017. If you don’t believe read the news; how much Mahinda contributed and persuaded the JO to donate all their salaries and go hungry for months. Now, what Lankan leader has such foresight and love for his people? …………… People like you will never see a great leader even if he falls on your head. No wonder, they say a prophet is never appreciated at home.

        • 3
          0

          Understand your irony. I think the boy had been crossed questioned during his visit to Japan last week AS to why his terms are alleged to have gone through all the high profile corruption.

        • 2
          0

          nimal fernando, “”I like your simple logic; easy to understand.”
          you have to give him credit for his far reaching economic policy. Lanka predominantly an agricultural country. Greece has gone back to agriculture non GM and agro industry as its mainstay. Putin has gone into non GM crops in a big way and are todays world leaders in cereals where canada is lagging. Present governance is full of jerks making more by begging into the future.

    • 9
      2

      “”Everything “” please reread as he is not stupid to talk about his faults of letting his siblings run riot etc. he merely is talking about positive aspects of his rule. What has your man the rustic village Bodi Sira achieved?

  • 4
    3

    eMr. Mahinda Rajapakse: You say: “My Government allowed the GSP+ to be withdrawn”. Can you please, talk to Mr. Dinesh Gunawardane, the then Minister of Water Supply in your regime, who questioned Mr. Ranil Wickramasinghe, the Leader of the Opposition re. this “withdrawal” in Parliament. If not, you can read through that debate in Hansard. In that debate you will find how Mr. Dinesh Gunawardane persistently questioning Mr. Ranil Wickramasinghe’s involvement by way of discussions held with EU officials, in getting the GSP+ withdrawn. In the heated debate, you will also find how Mr. Ranil Wickramasinghe mumbling and stating “even if I was involved, what is wrong with it”. Please tell your writer of this article to know the truth and refrain from deceiving the public and portray you as another “Hero” who “Allowed” the withdrawal. NO. It was WITHDRAWN having considered the “DESPOTIC” style of then Governance you and your cohorts established in this country. Please do not allow your cronies to make you a “Puppet” in their hands. That was your mistake and you still haven’t been able to recover. I feel sorry for you.

    • 6
      2

      Douglas,
      you cant challenge with a guy who would not know to use “millions” and ” billions” properly, even if he had been the minister of finance for the country for long 10 years. I have even enough evidences, this man MR has mixed it up not being able to be accurate in that context.
      So him to come with the kind of remarks -attacking the GSP plus would have been short lived – should be connected with his devious thoughts but nothing else.

      Even for a year or two, GSP plus would give a chance to lankens to raise the head. And the losses they made having got that banned during the days of MR – almost rapidly decreased the levels of SL s exports.
      Now just to add the kin dof lowlevel remarks just from him is like making him a king of clown to the world.

    • 4
      0

      as GLP then said the loss was a mere $23o million in a billion dollar business. the pride of Lanka being a sovereign nation was retained unlike the present Hignanage Tuvale.

  • 3
    7

    Yahapalanaya is a bullshit just like hens that laid smallest bijja or egg after so much of efforts. After sacrificing dignity of the country that defeated or wiped out most ruthless terrorist organisation existed on earth and betrayal of all three forces contributors of making peace and stability for country;s entire population what yahapalanaya received. only GSP plus small bijja. ha………ha……….ha………..ha……… what a pity.

    • 1
      2

      Ranjith,

      what is your problem ?

      1) I think you the like men have been born rotten and that is why you feel like the bunch of thugs were better than media freedom flowing rule

      2) In the high days of Ballige putha, he and his goons made almost everything to loot the state. Today, people have been under pressure thanks to former man. Please get him for a face to face discussion, the manner Mafia king argues even today give the view that he was no fit to the presidentshaft in SL. It was just the collectivity succeeded elemination of terror in the country.

      3). Why Srilanken made that huge few dozens of billions of looses since 2005 ?
      Last week, the man was heading to Japan – do you think the bugger would have used charter planes, had he been in power ? No matter, even Rajarata or other folks would have been suffered, the bugger et al, enjoyed his stupid life plus kith and kin. No matter anything would have been the consequence.

      4) Why you guys remained to be servile to a mann et al who looted it to the core. Provable evidence are heaping up… no means they can resist anymore.

  • 4
    2

    “Fulfilling the conditions to qualify for GSP+ could cause permanent damage to a country’s political, legal and institutional framework, which is why my government allowed GSP+ to be withdrawn in 2010 without agreeing to the political demands the EU- This is Rajapakse bullshit! What you are saying is that you are a great protector of the legal and institutional status of our country which you gradually and sytmenatical dismantled during your rule. Whether it is the EU or you both of you are one and the same entity. The difference is you cloak yourself with false patriotism, nationalistic values and anti western values for your political survival and have taken this country down a path of no return. Stop this bullshit!

    PS: tell G.L Peris who is a political opportunist to stop writing this crap for you.

    • 3
      0

      All politicians are humbugs but the act of refusal was the right action. Cheap things no good!

      • 1
        0

        Let me correct this, All politicians in SIRLNAKA are humbugs.

  • 7
    1

    Helping hambantota thief did not write this as everyone close to him knows how stupid he really is from a family of illiterates.

    • 2
      1

      Helping hambantota thief did not write this as everyone close to him knows how stupid he really is from a family of illiterates………..

      ……and exam cheats.

      • 5
        2

        So what it is not his mother tongue and neither is it yours.

  • 6
    1

    Mahinda Rajapaksa is casting aspersions on the restoration of GSP plus to Sri Lanka. This shows insensitivity to the plight of Lankan Muslims whose businesses are being set on fire. By the way MR, is it too early to dismiss the effect of restoration of GSP plus? Losing GSP plus was detrimental or was it in our imagination?

  • 2
    0

    Here come the GLP’s comedies. Is that, the lousy, naive lawyer/professor is betting that Yahapalanaya is going to full fill the term of GSP+? Does he honestly believe that Yahapalanaya is really going to implement any the UN treaties? Whom does he fool? I can bet on that. “In Tamil they say “Naan Addikkiramathiri addikkiran, Nee Azhukiramathi azhu. “ (I pretend like beating you up, you pretend like you are crying by the pain”.) That is politics of Lankawe the Ruling Party’s and Opposition Party’s games. They both strength their voter base with dramas like these. Joint Comedies doesn’t have a party to stand for election; Joint Comedies doesn’t have a candidate; Joint Comedies doesn’t have a theme or slogan to market. Thero De Silva was trying to create few for May Day. He lost on that. Wimal came out with “Black Flag for ModI” as May Day slogan. It ended up as “may day” for Old Royals at the meeting with Modi in the late night. Now GLP is tapping GSP+ as if that would click anywhere.

    Come on Comedy GLP! Which school in Lankawe you attended? Do know the meaning of Lankawe? It is the Dupe Masters Land! EU knows without any doubt that one single condition on the terms will not be implemented. But they just want you not to gain any propensity for your master, Old King. They (EU) were a partner with Ex Secretary John Kerry in chasing you guys out of Temple Tree house. Just remember that! You can brag that you guys cancelled GSP+, but they are just making sure you are not going back to Temple Tree house, from where they chased you out. I not fully denning that you had any part in the GSP+ stopping. But not the way you portray too.

  • 2
    0

    It is true for long time EU was begging Old Royals to take GSP+ and at least theatrically agree on their stand of Human rights. You demanded 40% from them if you have to agree on that. EU cannot give 40% and lose its pants so at last stopped begging you. All know of 2010. If you did not know that eventually you may ended up ousted out on Temple Tree House with EU’s support, you might have bent a little bit for EU rather than regretting now. So you lost the 40%; you lost your throne. EU saved its face. The loser UN did not have the treaties implemented, though it had withdrawn its staffs to help you for war without witness.

    The interesting point here is, with all the civilized laws in books and most pious religion is actively preached over loudspeakers all day along, Lankaweyans loot and eat or stretch the hands out for Biryani and Arrack. Lankawe has signed or ratified almost all (Rome treaty is the one I know not signed -Lankaweyans are too shrewd not to engage with ICC even for a joke) of the UN Conventions and resolutions. Thus they give the same respect for UN treaties too. In other words, all are Banda_Chelva, Dudley_Chelva, India_Lanka…………. pacts. The Yahapalanaya is one step ahead than your Chitanta government on its Appa Diplomacy in this; after signing for those with agreement of UN & UNHRC, it is doing its extortion bargains from EU for the GSP+ for having implemented those treaties it signed. Now it is a double jeopardy; that is benefits of the UN membership and GSP+, but nobody’s treaties are implemented. Foolish EU does understand that if Lankawe wants to have implemented any of the treaties, it would do without any pushing through the GSP+. But ……… EU’s Fate………….Caught by Lankawe!

  • 0
    3

    Look at EU economy whole members of EU nations are in line of capitalist crisis ,it cannot see the foreseeable future recovered their economies near future not possible.
    The GSP plus is uncertainties an issue it is good for UNP propaganda?

  • 1
    3

    MR is the better one than M3

  • 4
    5

    Why CT publish such cheap articles by a former ruthless dictator who plunged Sri Lanka to Banana Republic with his many siblings and a junta regime?

  • 0
    0

    Sir,

    Thank you for your views. It is unfortunate that the GSP concession is seen as a tool of imperialism when we could be blissfully ignorant.

  • 0
    0

    EU ECONOMY RECOVEER IS QUITE IMPOSSIBEL FORESEEBEL FUTURE !
    That is fact to be realized by readers. The Whole heap of economic, social and political complex problems in EU nations challenges by 21 century.
    Not that only surface of the unity is myth; but the uneven development of economy and disparity of have and have nots are daily widen between poor & rich of pre capita income in those countries. Given a GSP plus is political illusion of UNP leadership of Ranil W.. is stick of carrot of that party remain in power for ever !!!@

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