In news- A resolution has been adopted by the European Parliament, urging the EU Commission to consider temporary withdrawal of the GSP+ status given to Sri Lanka.
Key updates-
- Sri Lanka regained the EU’s ‘Generalised Scheme of Preferences’ in 2017 on its commitment to implement 27 international conventions on human rights, labour conditions, protection of the environment and good governance.
- The status effectively removes import duties on goods from Sri Lanka entering the EU.
- EU parliament on June 10 adopted a resolution expressing deep concern over Sri Lanka’s alarming path towards the recurrence of grave human rights violations, aminly in reference to the use of the Prevention of Terrorism Act (PTA).
- The resolution highlighted the “accelerating militarisation” of civilian government functions in Sri Lanka.
- The resolution came ahead of a periodic review of the ‘GSP +’ concessions accorded to the country.
Generalized Scheme of Preferences (GSP)-
- The GSP was instituted in 1971 under the aegis of UNCTAD to create an enabling trading environment for developing countries.
- The following 13 countries grant GSP preferences: Australia, Belarus, Canada, the European Union, Iceland, Japan, Kazakhstan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States of America.
- Following the WTO Hong Kong Ministerial Decision in 2005, improvements were made to various GSP schemes and new schemes for LDCs were launched.
- The provision and utilization of trade preferences is a key goal of the Istanbul Program of Actions adopted at the UN LDC IV in 2013, and further reaffirmed in SDGs Goal 17.
- The objective of UNCTAD’s support on GSP and other preferential arrangements is to help developing countries, particularly LDCs, to increase utilization of GSP and other trade preferences and in turn promote productive capacity development and increased trade.
- The EU’s GSP removes import duties from products coming into the EU market from vulnerable developing countries.
- This helps developing countries to alleviate poverty and create jobs based on international values and principles, including labour and human rights.
- The EU offers 3 types of GSP:
Standard GSP: It is for low and lower-middle income countries. This means a partial or full removal of customs duties on two thirds of tariff lines.
GSP+: the special incentive arrangement for sustainable development and good governance. It slashes these same tariffs to 0% for vulnerable low and lower-middle income countries that implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance.
EBA (Everything But Arms): the special arrangement for least developed countries, providing them with duty-free, quota-free access for all products except arms and ammunition. They are automatically granted the benefits of the EBA even if they have another arrangement in place.
- Developing countries are automatically granted GSP if they:
- Are classified as having an income level below “upper middle income” by the World Bank.
- Do not benefit from another arrangement (like a Free Trade Agreement) granting them preferential access to the EU market.
