Private sector wrath on Mahinda

Businesses angry over President turning blind eye on his Foreign Minister’s ill advised moves to recall envoy in EU amidst upcoming crucial negotiations for trade concessions
The country’s private sector is fuming over President Mahinda Rajapaksa’s failure to intervene and prevent his Foreign Minister from effecting what appear to be ill advised moves to recall envoy in Brussels, amidst crucial negotiations for trade concessions from the European Union (EU).
The victim is Sri Lanka’s Ambassador in Brussels and former Director General of Commerce K.G. Weerasinghe, who is a top public servant. The recall by roving Foreign Minister Rohitha Bogollagama is ahead of the completion of Weerasinghe’s three year term. Furthermore, the key Trade Officer too has been recalled.
The reason for private sector anger over the recall is that Sri Lanka has to make a fresh application to continue enjoying concessionary access regarding exports into the EU.
Private sector, especially the apparel industry, relies heavily on the EU as a major market and concessions offered to Lanka is also a magnate to draw fresh Foreign Direct Investments.
Sources said that the existing EU’s General System of Preferences (GSP) plus scheme expires this year and Sri Lanka, from next month, has to reactivate the entire lobbying process afresh. In that context, recalling the Ambassador, whose core expertise is trade negotiations, by April 2008, has caused serious concern within the apparel trade.

“Though we enjoyed GSP + benefits for three years, the country needs to start from zero, a fresh lobbying process. This is a very complex and challenging task. We understand that in the new round, EU has proposed more favourable terms for Least Developed Nations (LDCs) and reduced concessions to Sri Lanka,” apparel industry sources said.
Apart from the challenge of fresh lobbying, the EU has also revised the Rules of Origin (ROO) for exports to enjoy concessions under the second round of GSP+. It is learnt that LDCs has been proposed a 30% ROO requirement, while for Sri Lanka it could be as high as 50%.
“These changes require substantial and effective lobbying from earlier on and to recall the Ambassador cum former chief of Department of Commerce is a serious insult to the trade. It also undermines the government’s commitment to support the apparel sector,” analysts opined.
Perhaps to signal that he is insensitive to industry concerns, as well as the growing criticism, the Foreign Minister has also recalled key Trade Official D.W. Jinadasa, with effective from January 31, cutting short his tenure, which began in early this year.
Sources said that the recall of the Trade officer, also from the Commerce Department was over flimsy reasons and was certainly ill-timed.
“These hard negotiations with EU cannot be done by junior officers or by parachuting people from elsewhere. The two recalls are serious mistakes that would threaten the success of the crucial apparel industry,” they alleged. Shipments of apparel account for 40% of total exports. The EU GSP+ scheme also benefits several other export products.
As opposed to the tougher US market, the EU has helped Lankan apparel exports to grow overall. Total apparel exports had increased by 10% to US$ 2.7 billion in the first 10 months of 2007.
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