By:Staff WriterColombo (LNW): The European Union (EU) has welcomed Sri Lanka’s intentions to present next month a plan for the lifting of the import restrictions on around less than 1000 items from 3000 items (HS codes).
The matter had come up for discussion at the recently concluded Sri Lanka-EU Joint Commission sessions in Colombo. The Joint Commission took stock of the conclusions of the Working Group on Trade and Economic Cooperation held virtually.
The EU and Sri Lanka noted the significance of bilateral trade relations. “In this regard, the EU urged Sri Lanka to lift the import restrictions preventing many European products from entering its market.
The EU welcomed Sri Lanka’s intention to present a plan for the lifting of the import restrictions by June 2023. Sri Lanka expressed its intention towards a gradual phasing out of these restrictions, factoring in the current economic situation,” according to the joint statement following the discussion.
The government has restricted imports of 3000 items (HS codes) ranging from motor vehicles and air conditioners, to beer, clothing items, cosmetics and even spices such as turmeric — an essential cooking ingredient for many local households.
But the controls failed to either stop imports, or maintain foreign reserves as money was printed. Now the country is running balance of payments surpluses despite the import controls being brought down, he disclosed.
However the Sri Lanka‘s tile and sanitary ware importers have expressed concerns on the procedure of relaxation as they were waiting for around four years under the ban of imports while the government has lifted restrictions for several other non-essential items ignoring their business.
Sri Lanka‘s tile and sanitary ware business is heading for possible collapse following the repeated delay in the lifting of import restrictions for almost four years since mid-March 2019,several leading importers and traders said.
Although the present regime and the previous government had considered the appeals of other commodity importers by lifting the import ban on several items necessary for local industry survival, but official authorities kept on postponing the pleas of tile and sanitary ware importers, several leading importers and traders complained.
A considerable number of businesses are fighting for survival. Small business enterprises have already shut down, affecting direct and indirect employment of hundreds and thousands of people and their livelihoods.
A report containing this comprehensive plan will be submitted to the International Monetary Fund in June regarding the relaxation of import restrictions that are currently in effect.
Under this set up the Finance Ministry has devised a comprehensive plan with necessary guidelines to relax import restrictions in a manner that it would not be harmful to the government policy framework.
State Minister Semasinghe categorically stated that the government has not identified the relevant items which would be under relaxation of import control.
Sri Lanka’s imports in the first quarter of 2023 declined by 31.7% year on year to $ 3.85 billion. Last year imports declined by 11.4% to 18.3 billion. The EU and Sri Lanka also agreed that the EU-Sri Lanka Investor Dialogue may take place at an early date, in Sri Lanka.
The EU presented the new EU GSP Regulation, which is expected to enter into force on 1 January 2024, for the next 10-year cycle. The EU informed that the report of the last EU GSP+ monitoring cycle 2020-2022 is expected to be released in the coming months.