By  on February 16, 2010

GENEVA — The European Union on Monday withdrew preferential tariff benefits on Sri Lankan goods, including apparel items such as T-shirts, because of its poor human rights record, effective in six months.

The repeal of the lucrative benefits is conditional on Sri Lanka failing to redress its poor human rights record.

“I would like to emphasize that I hope Sri Lanka will sit with us over the next six months in order to agree to a set of measures that will result in a rapid, demonstrable and sustainable progress in relation to human rights shortcomings,” said new EU trade commissioner Karel De Gucht.

The suspension of the GSP+ benefits means that once the suspension kicks in, Sri Lankan exports would revert to the standard Generalised System of Preferences tariffs, the EU said. Under the EU’s normal GSP for developing countries, nations that qualify benefit from a 20 percent discount on standard tariffs, which, for apparel, is around 12 percent, according to a Sri Lankan trade diplomat.

Under the GSP+ program, aimed at encouraging “at-risk” developing countries to improve working conditions and diversify their economies, goods such as apparel have duty free status if they meet EU rules-of-origin criteria.

The Sri Lankan envoy said his nation is eager to resolve the problem through negotiations. Apparel exporters would face tens of millions of euros in extra duties if the benefits were removed.

In 2008, EU imports from Sri Lanka under GSP+ totaled 1.24 billion euros, or $1.69 billion at current exchange.

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