**The European Union has decided to suspend Sri Lanka’s preferential trade benefits because of concerns over the country’s human rights record.**Sri Lanka’s garments industry will be hit hardest, as it enjoys tax breaks to sell to retailers in Europe, a BBC correspondent reports from Colombo.
The EU decision is set to take effect in six months’ time, to give Sri Lanka a chance to address the “shortcomings”.
The special trade, called GSP Plus, was worth 1.24bn euros (£1.1bn) in 2008.
Besides garments, fisheries products are the most important Sri Lankan exports to the EU under the scheme, the European Commission says.
The temporary withdrawal of GSP Plus follows a year-long investigation by the European Commission. It identified “significant shortcomings” in Sri Lanka’s adherence to UN human rights conventions.
Sri Lanka has refused to co-operate with the EU inquiry and accuses European countries of double standards, the BBC’s Anbarasan Ethirajan reports.
The Sri Lankan government is facing increasing international calls for an independent investigation into allegations of war crimes committed in the final stages of the war between security forces and Tamil Tiger rebels last year.
“I hope Sri Lanka will sit with us over the next six months in order to agree upon a set of measures that will result in rapid, demonstrable and sustainable progress in relation to the human rights shortcomings,” EU Trade Commissioner Karel De Gucht said.
The EU inquiry found evidence of torture, police violence and breaches of child labour laws, officials say.
The EU operates a Generalised System of Preferences (GSP) for developing countries but extra benefits apply under GSP Plus, which covers 14 developing countries in addition to Sri Lanka.