US to review SL trade concessions

By Chathura Weerasekara

The Sri Lankan government is invited for further dialogue by the United States on reviewing trade concessions granted under its Generalized System of Preferences (GSP) that affects approximately 116 million US dollars of goods exported by the island, a senior official of the US embassy in Sri Lanka said.
This move comes in the aftermath of American Federation of Labour and Congress of Industrial Organizations (AFLCIO) petitioning against the concessions in 2008, demanding a review of worker rights in Sri Lanka.
In the petition filed by AFLCIO, it states that “The Sri Lankan government still fails to adhere to the internationally recognized worker rights. The government has also failed to effectively enforce its laws, let alone the international minimum set of labour rights”.
When asked whether AFLCIO has any political backing, the spokesman said it is considered the largest labour union in the USA, which can lobby as would any other union in the country.
A US embassy statement said countries must ensure that internationally recognized worker rights including the right of association, right to organize and bargain collectively, and a prohibition of compulsory labour are in place to qualify for GSP benefits.
Other criteria included measures against child labour, and occupational safety and health, work hours, minimum wages and working conditions.
According to the US embassy, their government is yet to determine whether the allegations in the petition are right or wrong. “Acceptance of the petition is not a decision to revoke GSP nor does it sets a deadline for a decision on action on GSP privileges. It is the beginning of a formal, collaborative process to work with the Sri Lankan government to address the concerns in the petition and work to improve support of and adherence to worker rights. GSP privileges will continue throughout the process,” the embassy said in a statement.
“It’s all about labour laws in Sri Lanka. In case the two governments fail to reach consensus through negotiations, there is a possibility of GSP concessions been revoked. There is no immediate trade impact to Sri Lanka from the issue. In 2008, Sri Lanka was the 18th top user of GSP benefits granted by the US, and received US$153 million worth tariff reductions. In the year of 2009, the tariff reduction under the US GSP program amounted to 116 million dollars. Sri Lanka exports 253 of 3400 GSP-eligible products to the USA, which is more diverse when compared with many countries. Among those are goods such as rubber tires, plastic sacs, rubber gloves, activated carbon, weighing machine weights, gold jewellery, porcelain, brooms and brushes. According to the Central Bank report (2009), exports to the USA amounted to 22% of the total of local exports during that year. In 2004, the figure was 32%. USA remains the largest export market for Sri Lanka, according to the report.