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Colombo - Sri Lanka's textile and apparel industry has raised concerns over its continued preferential trade access to its key European Union market after officials began an investigation into the country's human rights and governance concerns.

The investigation, which began last week, follows a European Parliament resolution inviting the EU to consider withdrawing Sri Lanka's access, citing "deep concern" over the country's deteriorating human rights situation.

The Reuters news agency reported that a delegation met government and company representatives, trade unions and United Nation officials recently with its report to the European Parliament expected in early 2022.

"The monitoring will focus on Sri Lanka's compliance with 27 international conventions related to GSP+ (Generalised Scheme of Preferences Plus) covering human rights, labour, environment and governance to which Sri Lanka has acceded," Colombo EU Delegation Chargé d’affairs Thorsten Bargfrede told Reuters.

Sri Lanka's preferential trade access to the European Union is the biggest market for its $5 billion apparel industry. The country exported 45 per cent, or $2.7 billion, worth of garments to the EU in the first seven months of 2021, up from $2.2 billion last year.

Under the current arrangements, as much as 60 per cent of Sri Lanka's exports to the region benefit from the EU's GSP+ concessions, a 9.5 per cent cost benefit, and are the country's second highest foreign exchange earner.

The industry sees GSP+ as crucial to attracting foreign investment and helping the sector to reach its target of $8 billion earnings by 2026, a 60% increase from current levels, Reuters said.

Sri Lanka gained GSP+ access for the first time in 2005, has previously had it withdrawn. The EU withdrew the facility in 2010, highlighting insufficient efforts by Sri Lanka to address human rights and reconciliation issues in the aftermath of a 27-year civil war, but it was reinstated in 2017.

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