Sri Lanka in race to keep trade pact
By Feizal Samath
COLOMBO - Sri Lanka has reacted strongly to a European Commission (EC) probe on
its human-rights record, saying it is politically motivated. But beyond the
public sparring and rhetoric, informal diplomatic contacts between the two
sides are underway to save a crucial trade pact and hundreds of jobs in the
garment industry.
Sri Lanka stands to lose its trade concessions from the European Union under
the Generalized System of Preferences Plus (GSP+), which has allowed tax-free
Sri Lankan exports to Europe since 2005. This, following the release last month
of the EC's probe of the island state's compliance with international treaties
on human rights.
On Friday, Foreign Minister Rohitha Bogollagama presented a 48-page government
response to the EC mission in Colombo and EU
diplomats on the damning report by the EC over Sri Lanka's alleged breach of
international conventions on core human rights, labor rights and conventions on
environment and good-governance principles.
Highly placed garment industry trade unionists privy to the informal engagement
between the government and the EC are eagerly awaiting the outcome of such
talks.
"We reliably understand [from our contacts in Brussels] that an EC diplomat
arrived last week for consultations on the GSP+ with the government and that
the government is seeking technical assistance to help it fulfill these
conventions," said one trade union official, who declined to be named.
"We were informed by an international NGO [non-governmental organization] to be
ready for a meeting with the official, but that didn't happen as he was
authorized only to meet government officials."
The EC office in Colombo confirmed an EC deputy director was visiting Colombo
but that it had nothing to do with the GSP+ trade benefits scheme. Sri Lanka
has applied for a second round of concessions for the new scheme, which began
in 2009, but must await the outcome of an EC probe on whether Colombo has
implemented 27 international conventions, a pre-requisite to approval.
Bernard Savage, the EC head of the delegation to Sri Lanka and the Maldives,
declined to comment on the government response. "I cannot comment. All I can
say is that we received the government's observations," he told Inter Press
Service (IPS) from the Maldives where he was on an official visit.
Thousands of jobs in the garment industry, the country's biggest export and the
main sector that would be affected if the concessions were called off, are at
stake if the concessions are not granted. Savage told IPS in an interview that
the EC decision on Sri Lanka's application would be announced by December and
be effective six months later. Until then, Sri Lankan exporters would continue
to enjoy the trade benefits.
The government response, submitted to the probe committee report on the
deadline set by the EC, said the probe was "politically motivated and
accompanied by a high degree of prejudice".
Substantiating this claim, the report quotes an incident last year in which EC
officials had threatened to withdraw GSP+ if the war against the Liberation
Tigers of Tamil, Eelam was not called off.
At a meeting with Sri Lanka's Minister of Export Development and International
Trade on March 13 last year in Brussels, an EC commissioner said, "This war is
never, never, never going to be solved militarily. The only possible solution
is a political one. We have been telling you this for a long time. You have
ignored us. We now have a powerful weapon in the GSP+, which we will not
hesitate to use."
The EC report was critical of alleged human-rights violations in Sri Lanka,
particularly during heavy fighting in the last stages of the war between
government forces and Tamil rebels. The near 30-year-long revolt was crushed by
government troops in May.
Garment manufacturers said the concessions were vital to the industry, which is
Sri Lanka's biggest foreign exchange earner along with remittances from migrant
workers.
However, one industrialist who was part of a team of officials from the garment
industry, other sections of government and lawyers that prepared the government
brief, said the EC probe smacked of a strong bias.
"For example, 15 member associations of the Joint Association of Apparel
Exporters, which goes by the acronym JAAF and represents the industry, sent
submissions to the EC probe team but none of our submissions was cited in the
report," he said.
"The investigations relied a lot on the anti-government submissions," lamented
the businessman, who declined to be named. Submissions from the industry
largely supported the government contention that there had been progress in the
implementation of the conventions on labor and human rights.
"We now have to contact our friends in Brussels and keep the dialogue going to
ensure the concessions continue," he said.
Separately, Anton Marcus, general secretary of a trade union representing
workers in the country's free trade zones where many garment factories are
located, said the union-styled Apparel Industry Labor Rights Movement was going
to meet on November 8 to discuss a course of action on the government response.
"We are meeting to discuss a course of action which we will explain to the
media on Thursday at a press conference," he told IPS.
Marcus said trade unions had pleaded with the government to start a dialogue
with the EC, which the former had refused, saying it would not take part in any
investigation, as it was an insult to a sovereign nation. "Now they want to
start a dialogue, which they should have done in the first place," he said,
referring to the report.
The government, while rejecting the EC report, said the government and the EC
should continue to have a constructive engagement on the "issues at hand".
The garment industry has suffered over the years, initially following the end
of textile quotas some years back before it was hit by the rising costs of
production, which has seen a sharp rise in job losses.
There are 270,000 workers in the industry, according to government estimates,
although the industry says the number is much lower because a number of smaller
units have collapsed. From about 400 factories and 500,000 workers in the
1980s, the industry has slumped to fewer than 250 factories while many are
struggling to survive.
"There are many orders, but the problem is costs. Interest rates are high at
22% and our return is only 3%. We just can't survive. Many small industrialists
have wound up or sold their factories to the bigger players," noted Cassian
Fernando, a garment industry veteran who sold his factories two years ago. He
believes the industry will consolidate to just 15 big companies in the years to
come.
Some garment industry workers hit by closures are seeking jobs as domestic
aides overseas. "There are quite a few who are undergoing training before going
abroad," said WP Aponsu, president of the Association of Licensed Foreign
Employment Agents.
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