EU set to reduce trade tariffs to aid rebuilding

Special EU trade concessions worth tens of millions of euros may be given to countries struck by the tsunami in a matter of weeks.

Peter Mandelson, the European trade commissioner, wants to rush through a reduction in tariffs affecting four Asian countries. The measure is due to come into effect in July, but could now be speeded up by several months.

The move follows calls for the EU to help the stricken areas by dismantling trade restrictions that hit Third World exporters.

The planned reductions in levies on exports from vulnerable countries are due to bring benefits to Sri Lanka, Thailand, Indonesia and India under a tariff suspension regime known as the Generalised System of Preference. In addition, the Commission is looking at how it applies measures designed to prevent Third World nations "dumping" goods. A spokeswoman for the European Commission said: "We are looking at the timing of this measure and where there is room to advance it. The difficult issue is finding concrete measures which do not lead to countries not affected by the tsunami taking advantage of the relaxation of existing rules."

The initiative is expected to be discussed at a meeting of the European Commission in Strasbourg today.

Sir Lanka stands to be a big beneficiary of the move because a 7.2 per cent duty on the export of clothing such as T-shirts would be eliminated.

For India, the reduction would be 2 per cent for similar products, while Indonesia would gain a 4 per cent cut in tariffs applied to its clothing exports.