Sri Lanka was readmitted as a beneficiary of the European Union (EU) Generalised Scheme of Preferences in mid-May 2017 with the new GSP Plus enabling duty free access to the EU market, constituting 28 countries, on 66 percent of the EU tariff lines for over 6,000 local products.
Importantly, the granting of these unilateral concessions created a level playing field for Sri Lanka in competing with other countries, especially neighbouring Pakistan and several African and South America nations, which enjoy preferential market access.
According to the EU, following the granting of GSP plus, Sri Lanka’s exports to the EU have increased more than 20 percent. Notable growth sectors include apparel, fisheries exports, which doubled in the first year since the removal of the fish ban and granting of GSP Plus, tea, tyres, gems, motor vehicle parts and footwear.
Since Sri Lanka’s entry into the GSP Plus scheme, the apparel industry has been the biggest beneficiary of the trade facility, accounting for 60 percent of the country’s US $ 3 billion exports to the EU.
In order to benefit from GSP Plus, Sri Lanka is required to implement provisions relating to several international conventions on human rights, labour, governance and environment, such as the Convention on the Elimination of All Forms of Discrimination Against Women, Convention concerning Freedom of Association and Protection of the Right to Organise, Convention on Rights of the Child, United Nations Framework Convention on Climate Change and Convention on Biological Diversity, all of which contribute to Sri Lanka’s economic development through the diversification of exports, attracting new investments and strengthening trade ties between Sri Lanka and the EU countries.
EU GSP Plus incentives have galvanised Sri Lanka to move ahead in producing higher quality sustainable products, follow ethical practices, including organic and green production, as well as adopt Fair Trade practices. Through such value-additions made in backward integration, new employment opportunities and industries have also been created. The concessions under GSP Plus also benefit Sri Lanka’s rural workforce. New export opportunities support the development and enhance the livelihoods of farmers engaged in the country’s agriculture and fisheries industries.
By demonstrating its commitment to progressively implementing the related conventions, the GSP Plus facility has also enhanced Sri Lanka’s ability to attract international investors, including foreign direct investments.
The EU continues to make periodic reviews to assess the progress in the implementation of the conventions relating to GSP Plus, engaging with the Sri Lanka government, civil society, business community and other local stakeholders.