By The Pulseline News Desk
Sri Lanka is preparing to reapply for preferential trade concessions under the European Union’s (EU’s) Generalised Scheme of Preferences Plus (GSP+), as the Government seeks to retain duty-free access to a significant portion of the European market under a new 10-year framework beginning in 2027.
Deputy Minister of Finance and Planning, Anil Jayantha Fernando has told Parliament on Thursday (5) that Sri Lanka would submit a fresh application during the transitional period between January 1, 2027, and December 31, 2028.
He was responding to a question raised by MP Ravi Karunanayake under Standing Order 27(2).
The EU’s renewed GSP framework will come into effect on January 1, 2027, and remain in operation until December 31, 2036.
Under the revised arrangement, countries currently benefiting from GSP+ concessions will have to submit fresh applications to retain their preferential access to the European market. Existing beneficiaries, however, will be allowed until the end of 2028 to complete the reapplication process.
Fernando has said the Government was working towards meeting the requirements necessary to retain Sri Lanka’s GSP+ status under the new framework.
32 international conventions remain central to eligibility
GSP+ is a special incentive arrangement designed to support vulnerable developing countries by providing preferential access to the EU market in return for commitments to sustainable development, human rights and good governance.
To qualify, beneficiary countries must ratify and effectively implement 32 international conventions covering human rights, labour rights, environmental protection, climate change and good governance.
The revised framework will retain these requirements, with countries expected to demonstrate continued compliance, fulfil reporting obligations and make measurable progress in implementing the relevant international commitments.
Applicants must also satisfy the EU’s economic vulnerability criteria, including requirements relating to the concentration of their exports.
Under the relevant threshold, the seven largest sections of GSP-covered product categories must account for more than 75% of the EU’s total GSP-covered imports from the applicant country over a three-year period.
Duty-free access covering 66% of EU tariff lines
Retaining GSP+ status is particularly important for Sri Lanka’s export sector because the arrangement provides complete suspension of customs duties on eligible products covering approximately 66% of all EU tariff lines, subject to specified exceptions.
The preferential access helps exporters compete in the European market by reducing the import duties otherwise applicable to their products.
For Sri Lanka, continued eligibility is therefore significant for maintaining export competitiveness and protecting market access for businesses trading with the EU.
EU to strengthen monitoring of compliance
The revised framework will also place continued emphasis on monitoring how beneficiary countries implement the 32 international conventions.
The EU’s assessment process involves engagement with national authorities, civil society organisations and other stakeholders, as well as monitoring missions to beneficiary countries.
Reports from the International Labour Organization and United Nations will also be considered when assessing compliance.
The European Commission and the EU High Representative for Foreign Affairs and Security Policy jointly submit monitoring reports to the European Parliament and the Council every three years.
Countries seeking GSP+ status will also be required to submit a forward-looking action plan outlining how they intend to implement the relevant international conventions.
The approach is intended to encourage sustained reforms and ensure that preferential trade benefits are linked to continued progress on human rights, labour standards, environmental protection and governance.
New framework sets conditions for withdrawal
The revised arrangement also specifies circumstances under which a country could cease to benefit from GSP+ concessions.
Unlike countries receiving Standard GSP benefits, GSP+ beneficiaries are not subject to the graduation mechanism that withdraws preferential treatment from specific product categories as their competitiveness improves.
However, a country will lose its GSP+ eligibility if it enters into another agreement providing preferential market access or exceeds the World Bank’s income classification threshold for low-income or lower-middle-income countries for three consecutive years.
Government considers alternatives to GSP+
Meanwhile, Fernando has said the Government was also examining longer-term options to strengthen Sri Lanka’s trade relationship with the EU, including deeper economic cooperation and the possibility of a trade agreement.
The Government’s immediate priority, however, is to complete the reapplication process and satisfy the eligibility and compliance requirements under the revised GSP framework.
With the new arrangement extending until 2036, Sri Lanka’s ability to retain preferential access will depend not only on meeting the economic eligibility criteria but also on demonstrating effective implementation of its international commitments.
The outcome will have important implications for the country’s exporters and its broader trade relationship with one of its key international markets.
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