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| Wednesday, 21 January 2004 |
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EU grants special incentives for Lanka With the granting of labour incentives by the European Union as of February 1, 2004 all Sri Lankan sensitive products which received a 3.5 percentage points reduction from the MFN rate will receive an additional 5 percentage points reduction which will make the total reduction from the MFN rate to 8.5 percentage points. The textiles and garment sector which received a 20 percent reduction from the MFN rate will now receive an additional duty reduction of 20 percent which will make the total reduction from the MFN rate to 40 percent. Some products with specific duties which currently enjoy a 30 percent reduction from the MFN rate under the GSP scheme will have an additional reduction of another 30 percent under the labour clause thus bringing the total reduction to 60 percent of the MFN rate. The only exception to this are the specific duty items under CN 2207 which currently enjoy a reduction of 15 percent under the GSP scheme; they will receive an additional 15 percent reduction as per the labour clause bringing the total reduction to 30 percent off the MFN rate. The major beneficiaries of this new incentive will be Sri Lankan manufacturers exporting to the EU markets whose products qualify as originating in Sri Lanka. As of February 1, 2004 their exports will be more competitive than those of its competitors. |
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