The European Union (EU) has urged Sri Lanka to end its import restrictions put in place as a response to economic hardships caused by the COVID-19 pandemic, saying the current curbs are having a negative impact on the businesses. A statement issued by the Delegation of the EU and the Embassies of France, Germany, Italy, Netherlands and Romania in Sri Lanka mentioned that “the EU is a crucial economic partner for Sri Lanka. Thanks to the EU’s special Generalised System of Preferences (GSP+), Sri Lanka enjoys competitive, predominantly duty- and quota-free access to the EU market, based on the continued implementation of 27 international conventions on human rights, labour, environment, climate change and good governance. Not least due to these unilateral trade preferences, the EU is the second biggest export market for Sri Lanka worldwide, with a positive trade balance of more than 1 billion EUR (about 220 billion LKR) in 2018 and 2019.”
“Trade, however, is not a one-way street. The current import restrictions are having a negative impact on Sri Lankan and European businesses, and on Foreign Direct Investment. Such measures impair Sri Lanka’s efforts to become a regional hub and negatively impact Sri Lankan exports by constraining the import of raw material and machinery. We recall that a prolonged import ban is not in line with World Trade Organisation regulations”, the statement added.
The statement was issued after the Sri Lankan government presented its 2021 budget, maintaining that import restrictions must remain in place to stabilize the rupee.