**Sri Lanka could lose special trading rights with the bloc because of a failure to improve its human rights record, the European Union has warned.**A year-long inquiry by the EU has revelaed “significant shortcomings” in Sri Lanka’s human rights efforts.
The European Commission now says it will ask the 27 EU member states if it should suspend trade privileges.
Deals with the EU worth more than $100m (£62m, 67m euros) are linked to Sri Lanka’s human rights record.
The European Union’s 12-month inquiry was launched during Sri Lanka’s final offensive against Tamil Tiger rebels in the north of the country.
It found evidence of torture, police violence and breaches of child labour laws, officials say.
The report outlines how it expects Sri Lanka to take “vigorous, rapid and verifiable” action to tackle discrepancies over its current human rights record.
Economic dependency
Correspondents say suspending Sri Lanka’s trade privileges would badly hit the country’s economy.
The EU is Sri Lanka’s largest export market, with textiles alone earning the country $3.5bn (£2.1bn) during 2008 alone.
Under current agreements, Sri Lanka is allowed to pay less for exporting clothes and fish products to the EU - two of its main staple industries.
Sri Lanka has refused to co-operate with the EU inquiry, stating that trade incentives are about economics and insisting that the issue has been “hijacked” by politics.
A decision on suspending Sri Lanka’s trade incentives could be taken by the end of November and take effect from early next summer, reports suggest.
Human rights organisations have regularly asked Colombo to free hundreds of thousands of Tamils living in military camps in the north of the country before monsoon weather accelerates serious health problems.