Help us to solve fishery and GSP+!

Lanka-Europe trade surpasses crucial $5Bn for the first time

• ’14’s three biggest exports: Apparels, tyres & frozen fish
• ‘Am here to remove unpleasant trade’-EU Trade Vice-Chair Zahradil
• ‘Now sending monthly progress reports to EU’-Rishad
• 69% of EU trade are exports from SL at $3.5Bn
• ‘Help us to solve fishery and GSP+’-Rishad
• ‘Yes!-shall take up with my Trade Committee’-EU Vice-Chair Zahradil

As Sri Lanka’s bilateral trade with European Union surpassed the crucial $5 Bn mark for the first time in trade history, a visiting influential EU Trade personality vowed no less than his personal engagement to solve the two most teething issues in bilateral trade-and to promptly reclaim its EU fishery exports status, Sri Lanka has commenced despatching monthly fishery progress reports to EU starting 06 March. “With the new government of HE the President Maithripala Sirisena, Sri Lanka is a perfect example of a real functioning democracy in the world. And I congratulate Lanka for crossing $5 Billion trade with EU. As for fishery and GDP plus, you can rely that not only me but even my other colleagues in other EU Committees would also take care of that!” vowed a determined looking Jan Zahradil (a Vice-Chair of EU Committee on International Trade, Member of EU Parliament and also a member of the EU Parliamentary Group ‘Friends of Sri Lanka’) on 06 March in Colombo.

EU Vice-Chair Zahradil was addressing Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on 06 March during his courtesy call on Minister Bathiudeen at Ministry of Industry and Commerce, Colombo 3. Joining Minister Bathiudeen was RDS Kumararatne (DG-Department of Commerce).

“As a Vice chair of EU Committee on International Trade (INTA), I am here to remove major unpleasant aspects of trade such as fishery ban and GSP plus and to here to find your inputs as to how to muddle through these in the easiest and fastest possible way” said EU Vice-Chair Zahradil, and added: “The EU Parliamentary Group ‘Friends of Sri Lanka’ of which I am a member, too wants to assess as to how to help Sri Lanka on fishery and GSP plus issues.”

The EU’s INTA is the powerful implementer of EU’s common commercial policy and external economic relations, including trade & investment legislation such as trade agreements and relations with WTO. As part of its legislation power was INTA’s achievement on review of the Generalised System of Preferences (GSP) and the Market Access Regulation (MAR). INTA has the final say on entry into force of all trade agreements. In October 2014, Maria Damanaki, the European Commissioner for Maritime Affairs and Fisheries stated in Brussels that Belize, Fiji, Panama, Togo and Vanuatu have taken very concrete measures to eradicate illegal fishing in their waters or their fleets, and it is EU pressure that has helped these countries to move to sustainable fisheries, adding “EU citizens have the right to know what lands on their plate. EU formally identifies Sri Lanka in the fight against illegal fishing, and the Commission will continue to work closely with Sri Lanka to guide it towards a better system.” According to the European Commission, in 2013, Sri Lanka was the second biggest exporter of swordfish and tuna to the EU.

Minister Bathiudeen, addressing EU Vice-Chair Zahradil said: “I am pleased to inform you that for the first time, bilateral trade between EU and Sri Lanka exceeded the $5 Bn mark in 2014. Our total trade with EU in 2014 stood at $5.07 Bn, increasing by 3.6% from 2013’s $4.9 Bn. 69% of 2014 trade were Lankan exports to EU” said Minister Bathiudeen addressing EU Vice-Chair Zahradil and added: “We need your full cooperation to solve some of our pending trade issues. The EU fish ban is affecting our 500,000 strong fishery sector livelihoods we being an island nation. Fisheries are an important product line of our annual total bilateral trade with EU. The EU fishing ban relates to illegal IEU related fishing –Vessel Monitoring System (VMS) and a National Policy to Control the Fleet in the high seas, bringing legislative amendments to fine illegal fishing vessels. I am pleased to say that under the supervision of Hon Prime Minister Ranil Wickremesinghe, a Committee has been appointed on the fishery ban that now meets on a weekly basis. All these issues are progressively addressed. For example a European firm has taken the responsibility to supply transponders to Lankan fishing vessels. As part of a National Policy, we started registering new vessels going to the high seas, in strict compliance with regulations and as a result, the number of illegal vessels in high seas have come down drastically. As for legislative aspect, relevant Acts have been passed by the Parliament. As RDS Kumararatne, my DG-Commerce here informs me, we have also decided to send progress reports on a monthly basis to the EU’s Directorate-General for Maritime Affairs and Fisheries (DG MARE) in Brussels. I am pleased to inform you that today 06 February we submitted our first monthly report to Brussels. Therefore we are moving fast. EU has been our number one market for fisheries, particularly for tuna. Therefore we hope that EU can make a quick decision, send their audit team, assess the progress that we made, and quickly reverse the ban. As for GSP Plus, it was unfortunately imposed at the peak of war on Sri Lanka. Now new measures to address all the issues of concern have been taken by the new government led by HE the President Maithripala Sirisena including the activation of various independent commissions, constitutional amendments, transparency etc. One election pledge in our 100 Day Program is to recover GSP Plus. Therefore we are very much positive that we can regain GSP Plus benefits. We need your support in this regard.”

Sri Lanka’s bilateral trade with EU that totalled $4.93Bn in 2012 edged to $4.94 Bn in 2013 and topped $5.077 Bn for the first time in 2014. The share of exports in overall trade too ballooned–at 64% in 2012, 66% in 2013 and 69% in 2014! Apparel was the biggest export item in 2014 at $2.16 Bn growing by 10.5% (YoY), second biggest ‘rubber tyres & tubes’ at $208 Mn and third biggest (interestingly) was ‘frozen fish’ at $90 Mn.

“With the new government of HE the President Maithripala Sirisena, Sri Lanka is a perfect example of a real functioning democracy in the world. And I congratulate Lanka for crossing $5 Billion trade with EU!” exclaimed EU Vice-Chair Zahradil, and added: “I shall definitely take this fishery matter to my Committee and extend my support to regain these benefits from the EU. You can take my visit as a pre-visit of EU fishery expert delegation. Anyway once the monthly progress reports are sent to the Commission then we could try to put this on the agenda as a special point and can help solve this issue as soon as possible perhaps in a horizon of months and not let it last for too long. As for GSP Plus, it is something which we again need to address in the Trade Committee since this new government will try best to settle the situation completely and it cannot be accused of any wrongdoing in this particular field.  You can rely that not only me but even my other colleagues in other EU Committees would also take care of that, and within our limited powers as Parliamentarians towards the EC, we shall promote for better resolution as quickly as possible. As for investments, power and energy sector of Sri Lanka are very promising.”

Following early February talks by Foreign Minister Mangala Samaraweera with European Commission in Brussels -and Minister Samaraweera’s assurance of speedy implementation of EU recommendations-it was announced that an EU fishery expert delegations would be arriving in Sri Lanka. The fresh and frozen fish exports to EU that stood at $80 Mn in 2012 increased by 23% to $98 Mn in 2013. In 2014, it further increased to $101.25 Mn-another 3.4% increase from Y2013.