Documents considered by the Committee on 8 February 2017 Contents

19Resumption of Generalised Trade Preferences to Sri Lanka

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; drawn to the attention of the Joint Committee on Human Rights and the Foreign Affairs Committee

Document details

Commission delegated Regulation amending Annex III to Regulation No 978/2012 applying a scheme of generalised tariff preferences.

Legal base

Article 10(4) of Regulation 978/2012; delegated legislation procedure

Department

International Trade

Document Number

(38457), 5270/17 + ADD 1, —

Summary and Committee’s conclusions

19.1The Generalised System of Preferences is a longstanding unilateral EU scheme that provides preferential tariff rates to developing countries that export to the EU. The GSP Plus (GSP+) scheme offers additional preferential access to countries that ratify and commit to implement and report on 27 international conventions relating to human and labour rights, environment, and good governance. GSP+ countries must also meet additional criteria relating to vulnerability.

19.2The EU withdrew Sri Lanka’s GSP+ preferences in 2010 following a Commission investigation that found serious failures by the Government to adhere to its commitments under international conventions on human rights. Following a change of government in 2015, Sri Lanka applied to the Commission in 2016 for a resumption of the GSP+ arrangement.

19.3The Commission has determined that Sri Lanka meets the eligibility criteria. It is empowered to adopt a delegated Regulation to add Sri Lanka to the list of beneficiary countries of the GSP+ arrangement. Despite shortcomings in implementation of relevant conventions, the Commission observes that Sri Lanka “has made important progress in addressing these shortcomings within a relatively short time span”. The Commission believes that the monitoring mechanisms under GSP+ will enable it to maintain dialogue with Sri Lanka on remaining issues, including concerns over a new Prevention of Terrorism Act.

19.4The Government informs us that it supports Sri Lanka’s application to re-enter the GSP+ arrangement, and that it agrees with the Commission’s assessment that the Sri Lankan government “has ratified the 27 relevant Conventions and have met the minimum requirements to qualify for GSP+ access”.

19.5While noting that monitoring reports have identified shortcomings that will need to be addressed, the Explanatory Memorandum states that “the UK does not consider that this amounts to serious failures of implementation”.

19.6The granting of unilateral trade preferences to developing countries is a long-established EU practice, and one that the UK has supported. To qualify for additional GSP+ preferences, applicant countries must provide evidence of adherence to core international conventions on human and labour rights, good governance and environment. In this instance, the Commission, and the Government, have determined that Sri Lanka, despite previous failures which led to the withdrawal of GSP+ access, now meets the basic criteria for re-admittance to the scheme. They appear confident that the monitoring process under the scheme will enable the EU to address existing shortcomings of implementation and reinstatement of GSP+ access would encourage Sri Lanka to make continued progress.

19.7However, we are also aware of concerns raised by civil society that the proposed resumption of preferences is based on a “flawed factual analysis”. They assert that granting the trade concession to Sri Lanka now would be premature, given that in March 2017 the UN High Commissioner for Human Rights is due to report comprehensively to the UN Human Rights Council on Sri Lanka’s progress in implementing its commitments on accountability and reconciliation.

19.8We recognise the political sensitivity of this delegated regulation. We regret that the 2 month deadline for dealing with this matter expires before the UN High Commissioner’s Report. We take note of the Government’s commitment to monitor progress by Sri Lanka in implementing relevant conventions on human rights, and in addressing identified shortcomings. We do not think it is necessary to retain this document under scrutiny, but draw it to the attention of the Joint Committee on Human Rights and the Foreign Affairs Committee, who may wish to request the Government for a briefing on the outcome of the UN Human Rights Council’s consideration of Sri Lanka in March.

Full details of the documents

Commission delegated Regulation amending Annex III to Regulation No 978/2012 applying a scheme of generalised tariff preferences: (38457), 4270/17 + ADD 1, —.

Background

Generalised System of Preferences

19.9The EU has granted trade preferences to developing countries through the Generalised Scheme of Tariff Preferences (GSP) since 1971. The ‘GSP+’ special incentive arrangement provides additional tariff preferences to developing countries for their exports to the EU. GSP+ beneficiary countries obtain full removal of tariffs on over 66% of tariff lines. At present, 8 countries 143 obtain GSP+ preferences.

19.10To qualify, countries must meet the following eligibility criteria:

19.11A country is defined as ‘vulnerable’ if:

Sri Lanka’s application for GSP+

19.12Sri Lanka was a beneficiary of the standard GSP arrangement since the scheme’s inception, and benefited from GSP+ from 2005. However, in 2010 the EU suspended and then removed Sri Lanka from the scheme following a Commission investigation which identified a number of serious concerns relating to failures to implement specific conventions, human rights abuses, and unlawful restrictions on civil and political rights.

19.13Following a change of government, Sri Lanka applied for re-admittance to the scheme in July 2016.

The Commission’s assessment

19.14The Commission reports that it has examined the request and established that Sri Lanka meets the GSP+ eligibility criteria. In terms of vulnerability, the seven largest GSP sections of Sri Lanka’s imports represent around 92% of its total imports, and the imports of specified products represent around 2.6% of the value of total imports of those products into the EU.

19.15Reports from the UN Committees responsible for monitoring adherence to the relevant conventions have informed the Commission’s assessment that “there is no serious failure to effectively implement any of these conventions”.

19.16The Commission Staff Working Document states in its conclusion that the monitoring bodies of the relevant conventions have detected “shortcomings” in relation to implementation. It notes that the Commission “will be paying particular attention to the identified salient shortcomings in its monitoring of the effective implementation of these conventions”.

19.17The Commission notes the “considerably more positive political context” in Sri Lanka following the election of a new President in 2015. It cites the new government’s initiation of a programme of “major reforms to address reconciliation and accountability in relation to the civil war, improve human rights and the rule of law, as well as governance and economic development”.

19.18The Staff Working Document cites the Sri Lankan government’s reengagement with the international community, and notes that Sri Lanka remains under regular scrutiny by the UN Human Rights Council—with the next comprehensive report on Sri Lanka due in March 2017. The Commission observes that it will take up remaining issues, including those identified in relation to the Prevention of Terrorism Act, through the “EU-Sri Lanka institutional set-up”, which includes a working group on governance, rule of law, and human rights.

19.19The GSP Regulation empowers the Commission to adopt delegated acts to amend Annex III of the GSP Regulation in order to grant GSP+ to a requesting country by adding it to the list of GSP+ beneficiary countries.

The Government’s View

19.20The Minister of State at the Department for International Trade (Lord Price) informs us that:

“the UK is a strong supporter of GSP+ in the EU. It encourages trade with developing countries through reduced tariffs on certain goods and ensures beneficiary countries take practical steps to support their sustainable development before entry to the scheme.”

19.21With regard to Sri Lanka’s application, the Minister states:

“the UK supports Sri Lanka’s application to re-enter GSP+. We agree with the Commission’s assessment that the Sri Lankan Government has ratified the 27 relevant Conventions and have met the minimum requirements to qualify for GSP+ access. The most recent monitoring reports note significant progress by the Sri Lankan government and, whilst identifying shortcomings which need to be addressed, the UK does not consider that this amounts to serious failures of implementation…..More broadly, the UK is a strong supporter of the current Sri Lankan government’s efforts to promote reconciliation and human rights in Sri Lanka. Reinstatement of GSP+, and the benefits it would bring to Sri Lanka, would be supportive of these wider efforts.”

19.22The Minister adds that the Government will continue to monitor progress, in particular with regard to the compatibility of forthcoming legislation on Prevention of Terrorism with international human rights and counter terrorism standards.

19.23The Government informs us that the deadline for raising an objection or extension is 24 February 2017.

Civil Society Representations

19.24An umbrella group of advocacy groups wrote144 to the Human Rights and International Trade Committees of the European Parliament on 3 February 2017 to express concern at the Commission’s proposal to restore GSP+ status to Sri Lanka.

19.25Their concerns are as follows:

19.26The campaign group urged the European Parliament to review the factual basis for the Commission’s case and to reject the proposal pending progress in the implementation of relevant recommendations by the UN Special Rapporteur on Torture and the UN Committee against Terrorism. As an alternative, they asked members of the European Parliament Committee on International Trade to ensure that the deadline for the ratification of the Commission’s proposal is extended from two to four months, to allow “full consideration” of the forthcoming report of the UN High Commissioner for Human Rights’ on Sri Lanka, and to increase leverage for a “robust follow up resolution at the upcoming UN Human Rights Council Session in March 2017”.

Previous Committee Reports

None, but background to the GSP scheme can be found in the Committee’s 33rd Report HC 428-xxix (2010–11) Chapter 3.


143 Armenia, Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Pakistan, Paraguay and the Philippines.




10 February 2017