GSP Plus is offered to encourage a wider range of products to be purchased by the European Union (EU). Most of Sri Lankan leading export products are included among the 7,500 products eligible for the EU GSP. More than 50 percent of Sri Lanka’s exports are exported to the EU and the US.
The EU consists of 28 powerful western nations with a population of 500 million with high purchasing power. GSP Plus exempts the World Trade Organisation (WTO) member countries from MFN for the purpose of lowering tariff preferences for developing countries. Sri Lanka was a beneficiary country from 2005-2010. Due to the withdrawal of the GSP Plus facility, most of Sri Lanka’s businesses were shifted to other Asian countries.
Sri Lanka could easily utilize more benefits from the EU standard GSP and GSP Plus for exports. In addition to apparel, the EU is the leading potential market for Sri Lanka fishery products, ceramic, coconut-based products, cut flowers and foliage and is a significant market for tea, spices, footwear and rubber products, among a large number of other products.
Producing higher quality products and following ethical practices have become key strengths for Sri Lanka. If Sri Lanka could enjoy the GSP Plus facility, our exports will increase significantly with less competition from advanced developing economies (high and upper-middle income countries), which do not benefit from the GSP scheme.
The apparel sector would be the biggest user of the GSP Plus scheme. With a considerable duty waiver of around 10 percent for apparel products, the Sri Lankan apparel exporters could definitely have a competitive market edge in the EU market. The apparel industry believes that it will enable the country to earn an additional US $ 500 million during the next 18 months from the expected increase in its order books.
Since after 2010, nearly 200 apparel firms have been closed down making many workers to be unemployed. These firms and workers will have better prospects to re-engage themselves in the industry with the GSP Plus restoration.
The Export Development Board (EDB) is keen to carry out a number of programmes covering several key sectors for the maximum utilization of the GSP Plus restoration. Initially the EDB is geared to develop strategies for the key potential sectors to maximize the export revenue.
Since losing the EU GSP Plus concessions in 2010, the SME apparel sector has mostly got affected. Though large companies are major contributors to the total apparel export earnings, there is a considerable contribution made by the SME apparel sector. Therefore, the SME companies need to be supported and developed for the sustainability of the industry. The EDB took steps to facilitate SMEs in SEDEX, BSCI and WRAP to gain confidence and build long-term business relationships with buyers.
Arrangements are also being made to organise the participation of Sri Lankan apparel companies at Apparel Sourcing Paris in September this year for the very first time.
A product development programme will be done to enhance the product quality of a selected group of footwear manufacturers/exporters by providing experts’ knowledge on shoe technology, targeting the international market, especially the EU.
The programme will be implemented in two stages. During Stage I, the experts will work with the selected companies to provide the knowhow on shoe engineering with suggestions to improve/upgrade products and production processes. Stage II of the programme will be implemented after three months of the completion of Stage I to provide further advice to develop a technically specified and improved product line to suit the international market and advise the participants in solving the problems they may encounter in implementing the suggested modifications to meet the international standards in their products.
The EU lifted the ban on fishing products last year on Illegal Unreported and Unregulated fishing (IUU) Sri Lanka and the seafood exporters are looking forward to re-establish the contacts with their buyers in the EU. Therefore, the EDB organised the participation of nine Sri Lankan seafood companies at Seafood Expo Global 2017, the world’s largest seafood trade event held in Brussels, Belgium in April 2017 as a platform for them to rebuild the relationship and to plan for increased exports with GSP Plus.