Without GSP+, Who will be the real victims?

busi1-2Warning alarms ring through the political as well as social circles with the remarks that European Union(EU) may revoke its Generalised System of Preferences (GSP) Plus concessions granted to Sri Lanka in a bid to teach a lesson to the government for its alleged human rights violations in the last phase of the three decade long war.

Unlike in the previous occasions where the government firmly stood against the EU allegations saying that the country does not want the GSP plus concession and the main Opposition UNP attempted to take political advantage, both parties are visibly concerned about the plight of the real victims of the revoke and are currently in negotiation with the EU.

The GSP Plus tariff concession scheme granted by the European Union has been a lifeline to the apparel industry in Sri Lanka which directly employs over 350,000 persons and more than 750,000 persons indirectly. It is the largest export commodity from Sri Lanka and the GSP plus has ensured that Europe is now the number one export market for Sri Lankan apparel. Exports to Europe now represent 52% of the apparel market contributing 3.4 billion US dollars and 9% of GDP. These concessions have enabled Sri Lankan enterprises to compete with other nations which have the advantage of cheaper infrastructure and labour costs.

Withdrawal of this concession would most definitely be a death blow to the apparel industry which bears the proud tag of ‘Garments without Guilt’ for maintaining “Children have no business in our business” as one of the prime industry ethos with devastating repercussions for the whole economy that would no doubt affect many especially in the rural sector. Several other products such as Fisheries, Gems and Jewellery, and rubber products will also suffer.

An estimated 250,000 workers employed in textile factories could lose their jobs with manufacturers forced to move or increase wholesale rates, leading to price increase of possibly 10% on popular Sri Lankan-made clothes in UK shops including Next and Marks & Spencer.

Thus, it is the opinion of traders, politicians, trade unions and the society as a whole that the EU decision to revoke GSP plus concession will only have a deadly blow in the lives of thousands of innocent civilians.

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3 Comments

  1. Pingback: No Budget for 2010 ? « D ZONE

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