- Preferential tariff ends by end-2023
- 2 more years granted to follow new scheme
Sri Lanka will continue to enjoy preferential access to the European Union (EU) market through the EUs Generalised Scheme of Preferences Plus (GSP+) system until 2025, despite the scheduled expiration of this preferential tariff system at the end of the year, according to the Department of Commerce.
Speaking to The Sunday Morning Business, Department of Commerce Multilateral Affairs Division Head Ameena Shafi Mohin stated that while the GSP+ preferential tariff system was set to conclude at the end of the year, the EU had extended it by an additional two years to enable Sri Lanka to submit its application and adhere to the new scheme of the GSP+ system.
Elaborating further, she stated that when Sri Lanka submitted its application to be part of the GSP+ tariff system, the country would be required to adhere to six additional conventions alongside the existing 27 conventions, as part of the new scheme of the GSP+ system.
“Sri Lanka is in compliance with almost all of the currently-stipulated conventions under the GSP+ system. However, we do not know what compliances the six additional conventions will require. These requirements have not been published yet,” she stated.
Commenting further, she stated that once Sri Lanka submitted its application and met the specified requirements, the country would be able to benefit from the GSP+ system for a further 10 years.
However, she pointed out that while the previous scheme involved reviews conducted by the EU every three years, there had been no indication regarding the process for conducting reviews under the new scheme of the GSP+ system.
GSP+ serves as a unique incentive for developing nations, encouraging good governance and sustainable development by providing preferential tariff rates for exports to the EU.
Sri Lanka initially qualified for GSP+ in 2005 but lost eligibility in 2010 due to non-compliance with EU requirements. However, the country regained eligibility in 2015.
As things stand, the utilisation rate of GSP+ benefits in Sri Lanka remains relatively low. According to the GSP Hub website of the EU, 87% of Sri Lanka’s current exports are eligible for tariff reductions under GSP+, but only 62% of Sri Lanka’s eligible exports make optimal use of its preferential market access.