Former Sri Lanka Prime Minister and United National Party (UNP) leader Ranil Wickremesinghe has called upon the government not to politicize and throw away the GSP Plus trade concession granted by the European Union cautioning that “our economy will collapse”.

Responding to the recent resolution adopted by the European Parliament calling for the temporary withdrawal of the Generalized Scheme of Preferences (GSP+) granted to the country, the former premier recalled that his Government had taken action to regain the trade concession to assist in developing the country’s economy in 2017.

“Our government took action to regain the GSP+ from the European Union to assist in developing the country’s economy in 2017. This facility provides Sri Lanka with permission to export goods to Europe without taxation, which led to a boom in the garment and fishing industries,” he said, according to ColomboPage.

He said an issue has arisen in the European Parliament this week regarding the GSP+ tax concession. “We have been warned that this concession will be revoked,” he added.

Wickremesinghe pointed out that Sri Lanka’s tourism industry is at risk at this time due to the COVID-19 pandemic.

“With the sinking of the X-Press Pearl, issues have arisen for our fishing industry as well. The number of people going abroad for employment has decreased. Therefore, our foreign exchange has fallen,” he said.

He noted that Sri Lanka borrowed USD 200 million from Bangladesh following the economic crisis caused by the decline in foreign exchange. At present, only the tea and garment industries can earn foreign exchange for the country.

“In such a case, we are reliant on the GSP+. If this tax relief is lost, the rupee will depreciate further and we will have to pay around 300 rupees per dollar. It will also lead to the loss of thousands of jobs,” the UNP leader cautioned.

He said in the face of the danger that has arisen, the GSP+ must not be politicized and the government should take immediate action to protect the concession.

“It’s the government’s duty to retain the GSP plus, not to throw it away. If you do that there will be a collapse of our economy. The rupee will depreciate to about 300 rupees per dollar,” the former premier said urging the government to think of the people.

“Do not add any more weight to the heavy economic burden that the people are carrying. I urge the government not to destroy the country,” Wickremesinghe said.

The European Parliament last week adopted a resolution on the human rights situation in Sri Lanka calling for the repeal of the Prevention of Terrorism Act (PTA).

The resolution also called for the temporary withdrawal of the Generalized Scheme of Preferences (GSP+) granted to the island nation as the law is deemed incompatible with the conventions that the country has to implement under the GSP+ facility.

Sri Lanka regained access to generous EU tariff preferences under the GSP+ on 19 May 2017, on the condition that it replaces the PTA and effectively implements 27 international conventions, including on human rights.

(SAM)