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SRI LANKA: Garment Sector, Gov’t Optimistic about Trade Pact with EU

Feizal Samath

COLOMBO, May 26 2010 (IPS) - Relations between Sri Lanka and European Union (EU), which turned frosty around six months back, appear to be thawing as the government makes a last ditch stand to regain a crucial trade concession that has been suspended over human rights issues hounding the south Asian island state.

A high-powered government delegation led by Sri Lanka’s Attorney General Mohan Peiris and including Finance Secretary Dr P.B. Jayasundera and Foreign Secretary Romesh Jayasinghe returned home over the weekend following talks last week with EU officials in Brussels, considered the regional bloc’s de facto capital.

The meeting was the second in two months over the possible resumption of a tax free trade pact between Sri Lanka and the EU.

“The discussions have been cordial and held in a constructive atmosphere,” said Bernard Savage, Head of Delegation to Sri Lanka and the Maldives from the European Commission, declining to give details of the talks.

However, in what western diplomats, who declined to be named, see as a “refreshing attitude from Sri Lanka,” the Sri Lankan official team, during their Brussels meeting, invited the EU to be partners in a three-year post-war development project costing 3 billion U.S. dollars that is to be launched soon, according to a foreign ministry statement released to the media after the talks.

The statement added that Jayasundera made the offer during a meeting of the delegation with Dr Kristalina Georgiva, European Commissioner for International Cooperation, Humanitarian Aid and Crisis Response.

In January, the EU suspended Sri Lanka’s tax free exports to Europe for a range of products, including garments, over Colombo’s refusal to cooperate with an EU probe team organised in mid-2009 to ascertain whether the country had implemented 27 international conventions on human and labour rights, environment and good governance. The government said such a probe was a violation of the country’s sovereignty.

The concessions will continue until mid-July under a six-month grace period which the EU granted in the hope that the dispute would be sorted out.

Rohan Masakorala, secretary general of the Joint Association of Apparel Forum, an umbrella group representing hundreds of garment exporters, said European buyers have been pinning down Sri Lankan manufacturers on the trade concessions, which remain uncertain. “Buyers are repeatedly asking us whether tax free imports would be allowed,” Masakorala said.

Relations between Sri Lanka and Europe have never been as bitter as they are now, essentially over allegations by human rights groups and the West that hundreds of civilians were killed or wounded during the fighting between government troops and the secessionist Tamil rebels in the final stages of the conflict.

More than 80,000 combatants and civilians died throughout the decades- long war while thousands more were wounded or maimed. The rebels were finally defeated in May 2009, ending a near 30-year-long bruising battle for some autonomy for minority Tamils.

The Sri Lankan government said the EU was leveraging on these human rights accusations to withdraw the trade benefits, which benefit the garment industry the most. The EU denied the charge, saying the suspension was purely based on the rules of the Generalised System of Preferences Plus, which sets out the criteria by which a country could enjoy such benefits.

Garments are Sri Lanka’s biggest export, of which 60 percent goes to the EU and the balance to the United States. The sector stands to lose the most if the concessions finally end in July.

But optimism over the ongoing talks and that they would end positively with a resumption of the trade benefits has been growing in recent weeks.

“I think there is a good chance we can get these concessions but the government should also be realistic and give clear assurances that ILO (International Labor Organization) conventions would be implemented,” noted Anton Marcus, general secretary of a trade union representing workers in the country’s free trade zones, where many garment factories are located.

Earlier this month the government announced steps to bring about national reconciliation and healing in the aftermath of the war. These include relaxing some emergency regulations that have remained in place even after the war ended and appointing a Reconciliation Commission on the lines of South Africa’s Truth Commission to give voice to the war victims and facilitate a healing process for the nation.

According to the foreign ministry, these measures were explained by the Sri Lankan delegation to EU officials during last week’s talks in the Belgian capital.

Most garment industrialists, though worried about a possible end to the concessions, are confident that there is light at the end of the tunnel.

“I don’t think the EU would want to jeopardise the jobs of over 300,000 people who depend on this industry,” said the chief executive officer of one of Sri Lanka’s largest garment firms, who declined to be named.

“I am sure these concessions would be won back. Recent efforts by the government have been aimed at wooing back the EU,” said another apparel exporter, also speaking on condition of anonymity.