.:: Sri Lanka - EU Relations ::.

Sri Lanka - EU Relations

Political Relations

Sri Lanka’s relations with the European Community commenced in 1962. While the Embassy of Sri Lanka in Brussels was set up in 1973, and was accredited to the EU, having previously operated from New Delhi, the European Commission established its Delegation Office in Colombo in September 1995.

An agreement covering Trade and Economic Cooperation was signed on 22^nd July 1973. Today, relations between the European Commission (EC) and Sri Lanka are governed by a subsequent third generation agreement, Co-operation Agreement on Partnership and Development between the European Community and Sri Lanka, which came into force on 1^st of April 1995.

The Sri Lanka-EC Joint Commission set up under the Agreement has held 17 sessions so far and has been supplemented by periodically held Sub-Commission Meetings. The purpose of the Joint Commission is to ensure the proper functioning and implementation of the Agreement, to make suitable recommendations to promote the objectives of the Agreement and to examine ways and means to enhance the cooperation in the areas covered by the agreement. The last meeting of the Joint Commission was held in Colombo on 10 June 2008, after a considerable length of time, the previous session having been held in Brussels in October 2004. This was preceded by a visit to Sri Lanka by an EU Troika delegation representing Slovania, France and the European Commission in March, 2008.

Sri Lanka also maintains a strong relationship with the European Parliament(EP). The ‘Friends of Sri Lanka’ group of the EP was re-launched on 4 June 2008, under the Chairmanship of MEP Geoffrey Van Orden and the patronage of the Ambassador. Over 25 MEPs from Belgium, Czech Republic, Estonia, France, Germany, Ireland, Netherlands, Poland, Portugal, Slovakia, Spain and the UK, belonging to the EPP-ED (Conservative), PES (Socialist), ALDE (Liberal), UEN (Union for Europe of the Nations Group), GUE-NGL ( Nordic Green Left) parties and also non-attached members, constitute the group. The Embassy remains engaged with the relevant Committees of the EP – on Foreign Affairs, Trade, Development and Civil Liberties, Justice and Home Affairs, as well as the Foreign Affairs Committee’s Sub-Committees on Human Rights and on Security and Defence. It also coordinates with the EP’s statutory body dealing with the Delegation for Relations with South Asia. A European Parliamentary delegation most recently visited Sri Lanka from 20-26 July 2008..

Sri Lanka also signed a Readmission Agreement with the European Union on 4 June 2004. This is the first formal agreement Sri Lanka entered into concerning the combating of illegal immigration. The Joint Declaration on the Facilitation of Law Enforcement Cooperation, constitutes an integral part of the agreement. It recognizes the need for the two parties to take measures to combat organized criminal activities, including human trafficking, migrant smuggling and financing for terrorist purposes.

The 27 member European Union listed the Liberation Tigers of Tamil Eelam (LTTE) as a terrorist entity on 29 May 2006, and several EU member states including Denmark, France, Italy and the UK have launched criminal prosecutions against known operatives of the LTTE and its front organizations. In June 2008, the Government of Sri Lanka made a formal submission to the EU to also list the Tamil Rehabilitation Organization (TRO) and other LTTE front organizations, which have been clearly identified, including by the US government, as raising funds for the LTTE, and are entities who act for, or on behalf of, or at the behest of the LTTE. A Sri Lanka - EU dialogue on “The Fight Against Terrorism”, was held in Colombo on 11 June 2008, following the Sri Lanka – EC Joint Commission meeting. On 10-11 December 2008, co-sponsored by the US Government and the EU’s French Presidency, a two day International seminar on the LTTE was held at EUROPOL, to discuss with EU member states and affected third countries, the ramifications of the activities of the LTTE and its numerous front organizations.

In September 2007 Foreign Minister Rohitha Bogollagama held wide ranging discussions with the EU in Brussels. This was followed by visits by Disaster Management and Human Rights Minister Mahinda Samarasinghe in October 2007, Export Development and International Trade Minister Prof.G.L.Peiris in March 2008, and Secretary, Ministry of Foreign Affairs Dr. Palitha Kohona in September 2008.

Development Co-operation

The EC is one of Sri Lanka’s leading development partners and has provided significant development assistance to Sri Lanka.

The EU has made significant contributions on the ground in connection with the Tsunami recovery. In January 2005, in the aftermath of the tsunami, European Commissioner for Development and Humanitarian Aid Mr. Louis Michel, visited Sri Lanka and met with President Chandrika Bandaranaike Kumaratunga. Euro 102 Million has been allocated under the EC Tsunami Assistance Programme.

EC Food Aid Counterpart Fund contributes in assisting Internally Displaced Persons (IDPs) to re-start their economic activities. Euro 2.4 Million has been allocated for this purpose.

Further, the EC Multi Annual Indicative Programme has allocated Euro 52 Million for the period 2007-2010, for stabilization and re-construction in the North and East and Development through Trade and Good Governance.

Trade & Commercial Co-operation

The 27 member EU, has emerged as the number one market for Sri Lanka’s exports. In 2007, the total value of Sri Lanka’s exports to the EU reached an all time high of US $ 2,876.8 million, which accounts for 37.4% of the total exports of Sri Lanka, registering a 21% increase over 2006 (Table 1). The recent surge in Sri Lanka’s exports to the EU is mainly attributed to the tariff concessions enjoyed under the GSP + arrangement that became effective from mid 2005.

Sri Lanka’s major exports to the EU are, apparel and clothing accessories (50.4%), diamonds (processed) (10%), tyres (retreaded) 4.5%), tea (3.7%), other rubber tyres (1.9%), parts of goods heading No. 8801 or 8802 (2.0%), gloves (1.7%), tobacco (1.4%), vehicle and parts (1.3%), articles of vulcanized rubber (0.9%), coconut coir (0.7%), ceramic products (0.7%), fish products (0.7%).

Major export destinations for Sri Lankan products in the EU Market are the UK (21.5%), Germany (15%), Belgium (17%), Italy (11%), France (10%), Netherlands (5.5%) and Spain (2%).

The EU is also a main source of supply to Sri Lanka. In 2007, the total value of imports from EU stood at US $ 1,398.2 million registering a slight decline compared to the corresponding value of the previous year. The EU share of Sri Lanka’s total imports was 12.3 % in 2007. The balance of trade has been in favour of Sri Lanka over the years, and shows an increasing trend.

Sri Lanka’s major imports from the EU include rough diamonds (14.8%), boilers & machinery parts (13.7%), sugar (7.3%), transmission apparatus (4.3%) knitted or crocheted fabrics (3.7%) records, tapes and related items (3.0%), gold (2.7%), iron and steel and its articles (2.6%), special woven and tufted textiles (2.0%), rubber based articles (1.9%), electrical apparatus (1.7%), medical instruments (1.6%), plastics and articles (1.5%).

More trade data pertaining to the pattern of trade and the overall evolution of the EU’s trade with Sri Lanka covering main products groups and Sri Lanka’s trade share in the European Market are presented in (Table 2) (Table 3) (Table 4) (Table 5) (Table 6)
(Table 7) (Table 8) (Table 9) .

Investment in Sri Lanka

Among EU countries, the UK, Germany, Italy, Belgium, France are the main sources of investment in Sri Lanka. These countries have invested in diverse fields including apparel, hosiery, knitwear, surf sails. textile, electronic products, light engineering, rubber based products, (e.g. tyres), coir based products, gem and jewellery, diamond processing, tourism and recreational products, security printing, infrastructure development, activated carbon, food processing, computer software, IT enable services, etc

Tourism

EU countries are also a main source of tourism for Sri Lanka. In 2007, around 195,000 tourists arrived in Sri Lanka from the EU countries. This is almost half of Sri Lanka’s tourism arrivals. UK, Germany, France, Italy and the Netherlands generate the largest tourist traffic from the EU region.