COLOMBO, Dec 2 (Reuters) - A trade scheme that boosted Sri Lanka's top export, garments, will remain in place while the European bloc completes a human rights probe that could lead to withdrawal of concessionary terms, Sri Lanka said on Tuesday, December 2nd.

Photo : Reuters

The European bloc since July has repeatedly warned it may not renew the scheme at the end of the year because of human rights abuses stemming from Sri Lanka's civil war with the separatist Liberation Tigers of Tamil Eelam (LTTE).

"We will enjoy the facility until the investigation is over," S. Ranugge, secretary at the ministry of export development and international trade, told Reuters.

However, he said the government would not cooperate with investigators if the European bloc sends them to Sri Lanka.

"That has been communicated to the E.U. by the government. Sri Lanka will cooperate with the investigations, but not with the investigators," Ranugge said.

In October, Sri Lanka rejected the probe demand, saying it was a betrayal of the country. Instead, it said it would offer up to $150 million in support to the textile industry -- the amount of benefit it estimates the scheme provides -- if it were axed.

An E.U. spokesperson in Colombo said the rights probe started in October and must be completed within a year.

"We cannot say it will be six months or a year. Until a decision is made afterward, Sri Lanka will continue with GSP Plus," the spokesperson said on condition of anonymity.

The Generalised System of Preferences Plus (GSP Plus) had been due to expire at the end of the year, and the European Union said the rules governing its extension required a certification that Sri Lanka meets certain human rights standards.

Garments last year were the country's top source of foreign exchange, followed by remittances of $2.5 billion and tea exports of $1 billion. The trade scheme helped Sri Lanka net a record $2.9 billion from E.U. markets last year.

With the economy beset with high interest rates and some of South Asia's highest inflation, many in the industry feared a loss of the trade terms would hit profits and force job cuts from a workforce of a million people, most from poor rural areas.

Rights groups have reported hundreds of abductions and killings blamed on government forces and Tamil Tiger rebels since a ceasefire in the 25-year-old civil war evaporated in 2006.

The government has admitted there are abuses and that it is working hard to address them while it tries to press ahead with the greatest military success against the LTTE by any government so far in the war, one of Asia's longest insurgencies. (Writing by Bryson Hull; Editing by Sanjeev Miglani)