Sri Lanka: Gov’t, EU in back-channel talks over fate of trade pact

IPS | 8 November 2009

SRI LANKA: Gov’t, EU in Back-channel Talks Over Fate of Trade Pact

By Feizal Samath

COLOMBO, Nov 8 (IPS) — 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 Generalised System of Preferences Plus (GSP+), which has allowed tax- free Sri Lankan exports to Europe since 2005. This, following the release last month of 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, labour 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 organisation] to be ready for a meeting with the official, but that didn’t happen as he was authorised 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, 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 IPS from the Maldives where he is on 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 last week that the EC decision on Sri Lanka’s application would be announced by December and 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 where EC officials had threatened to withdraw GSP+ if the war 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 are 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 has been progress in the implementation of the conventions on labour 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 Labour Rights Movement or ALaRM was going to meet on Nov. 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.

Currently, there are 270,000 workers in the industry, according to government estimates although the industry says it is much less because a number of smaller units have collapsed. From around 400 factories and 500,000 workers in the 1980s, the industry has slumped to less than 250 factories while many are struggling to survive.

"There are many orders, but the problem is costs. Interest rates are high at 22 percent and our return is only 3 percent. 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 W.P. Aponsu, president of the Association of Licensed Foreign Employment Agents.

source: IPS