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EU maintains 110 million Euro financial aid to Sri Lanka

2014 Mar 10

By Bandula Sirimanna

Despite concerns on human rights, good governance, and ethical industrial practices, European Union’s (EU) financial assistance to Sri Lanka will continue at the same level without any change from the previous six year period, the new EU delegation head in Sri Lanka said.

The EU financial assistance will remain at Euros 110 million for the period of 2014 to 2020, exactly the same level of 2007 – 2013 period, he revealed.

David Daly

Disclosing latest developments in EU- Sri Lanka economic and financial cooperation in an interview with the Business Times, David Daly, the new head of the EU delegation to Sri Lanka and the Maldives said that their new aid programme is aimed at poverty alleviation and uplifting the living standard of rural poor.

This was the first interview given to a local newspaper by the veteran diplomat after his assumption of duties here in Colombo.
Ambassador Daly had previously been the Acting Director in the European Commission responsible for the negotiations of Croatia and Turkey to the European Union and for relations between the EU and the Former Yugoslav Republic of Macedonia.

He had been responsible for relations with many countries of the Western Balkans.

Previously, Ambassador Daly had been posted to Budapest and had worked as a trade negotiator for the EU where, he had served on a standing disputes settlement and notification panel at the WTO in Geneva (Textiles Monitoring Body).
“Our focus will be on core areas of Central and Uva provinces and we are already working in North Central and North Western provinces in addition to the North East,” he said adding that EU is adhering to government priorities based on the ‘Mahinda Chinthana’.

EU cooperation would also concentrate on integrated district development in those areas most affected by poverty in the north and east of the country.

In the current situation, support could be shifted from conflict-affected areas and border villages to other parts of the country, Mr. Daly said.

He noted that EU concentrates on a number of key areas of cooperation, such as; diversification of trade and investment, networking between EU and Sri Lankan business communities, strengthening technical, economic and cultural linkages, providing technical assistance to Sri Lanka to interact more effectively with the European Union.

He disclosed that he attended a meeting with Economic Development Minister recently and the discussions were mainly centred on the setting up of economic and cultural cluster.

Referring to housing assistance extended to displaced in the North and East, he said, “From its inception in 2011 to completion in June 2015, this housing recovery programme would have assisted almost 10,000 families. By 2015 EU will have funded the reconstruction of about 10,000 houses in North and 10,000 in East Sri Lanka”.

”In addition to housing, the initiative also provides vital community infrastructure facilities such as common wells, access roads, community centres and preschools,” he added.

EU is also looking at providing more assistance towards developing trade ties between the EU and Sri Lanka. Sri Lanka should adhere to World Trade Organisation terms and conditions to penetrate the EU market and focus on country specific products such as Cinnamon, Spices, Tea, etc preserving geographical indications, Mr. Daly said.

The EU supports better protection of geographical indications internationally due to the increasing number of violations throughout the world.

The EU is active in multilateral and bilateral negotiations protecting EU geographical indications, he opined.

He also spoke highly on Sri Lanka’s potential in the fisheries sector. Sri Lanka’s fish products including tuna are fetching a high demand in Europe and The island nation is also a member of the Indian Ocean Tuna Commission.

Mr. Daly said that the Sri Lankan exporters should add value to their products, implement sustainable fishery, and maximise the opportunities the European tuna market has to offer.

EU trade support will be provided through technical assistance programmes to help local businesses meet EU hygienic and safety standards, and to obtain certifications.

These certifications are particularly important for Sri Lankan food and agricultural exporters, he said.

The EU is now Sri Lanka’s biggest trading partner accounting for about 27 per cent of Sri Lanka’s total exports.

The current trade deficit is in favour of Sri Lanka as its exports are amounting to Euros 2.2 billion and imports Euros 1.3 billion, he observed.

EU imports from Sri Lanka are now allowed standard GSP preferential treatment, under which the country would still enjoy preferential access to the EU market for its key export items such as clothing that is at least as generous as it presently enjoys in other major developed country markets, Mr. Daly pointed out Sri Lanka is enjoying low tariff concessions under EU GSP granted from this year although it has lost GSP + facility of almost zero tariff in 2010, he said adding that EU’s tariffs are low for many products except agriculture products, textiles and clothing.

The decision to withdraw GSP+ from Sri Lanka is based on the findings of an exhaustive European Commission investigation on human rights and other issues launched in October 2008 and completed in October 2009.

Sri Lanka has become a fully fledged middle income country and it has received the GSP facility as its relations with EU are moving towards another direction, he disclosed.

But no one should be confused about it as the GSP + and GSP are two different concessions granted by EU, he pointed out.
The new GSP scheme will remain in effect for 10 years from January this year. Sri Lanka is listed in the “Low and Lower Middle Income GSP beneficiaries” category in the new scheme.

Mr. Daly, with over 20 years experience in the external relations side of the EU service and who has previously served in the Irish Diplomatic Service, has pledged to strengthen and broaden the ongoing dialogue between the Sri Lankan government and the EU to find ways and means to enhance the existing cooperation.He said, “I have been highly impressed about the peoples’ hospitality that has been shown to me where ever I have visited during my six months on the island. I look forward in continuing the work carried out by my predecessors in accordance with EU principals and directives of head quarters in Brussels,” he added.

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