The European Commission (EC) on February 15th this year decided to suspend the GSP+ trade facility to Sri Lanka following an investigation by the European Commission that said the country fell short in implementing three UN human rights conventions relevant for benefits under the scheme.
The Commission gave six months time until August 15th to rectify the concerns and set specific demands to satisfy their requirements.
The Sri Lankan government in June said the conditions set by the EC to extend the GSP+ tariff facility are so "unacceptably intrusive" and intervene in the affairs of the country.
Sri Lanka's exporters fear that loss of tax concessions at the European market may bring losses in profits and eventually lead to job cuts. They estimate the annual losses of earnings due to the tariff suspension would be about USD 500 million.
However, The Central Bank of Sri Lanka says on a net basis the total value of the losses as a result of the withdrawal of the concession is to be only about USD 102 million a year and the government has strengthened the macro economic fundamentals to face any eventualities positively and has taken several measures to deal with the loss.
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