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COLOMBO (Reuters) - The European Union's executive on Wednesday proposed that the bloc reinstates a trade concession to Sri Lanka as an incentive to the government to promote human rights and good governance.
The move, a victory for the new coalition government, could boost Sri Lanka's exports, which have been falling due to sluggish demand from advanced economies.
The European Commission's trade commissioner, Cecilia Malmstrom, said the move could make a significant contribution to Sri Lanka's development by increasing exports to the EU.
"But this also reflects the way in which we want to support Sri Lanka in implementing human rights, rule of law and good governance reforms," she said in a statement.
The removal of customs duties was granted again in exchange for Sri Lanka's commitment to ratify and implement 27 international conventions on human rights, labour conditions, protection of the environment and good governance.
The move would be accompanied by rigorous monitoring, the commission said. It will become effective in four months if the European Parliament and the Council do not raise objections.
Sri Lanka lost the concession in 2010 after then-president Mahinda Rajapaksa rejected international demands to address human rights abuses allegedly committed during a 2009 offensive to crush a Tamil insurgency.
Since ousting Rajapaksa in January 2015, the coalition government of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe has agreed to address the alleged abuses via an impartial mechanism that meets international standards.
Sri Lanka's garment industry, which produces clothes for some of popular brands such as Victoria's Secret, Tommy Hilfiger, Nike, and Marks and Spencer, estimates the trade concession helped it save $500 million each year.
The EU is Sri Lanka's second-largest importer of goods after the United States, accounting for about a fifth of its total exports.
Reporting by Shihar Aneez; Editing by Angus MacSwan