GSP+ till 2023 but process not automatic
The European Union’s (EU) GSP + facility regained by Sri Lanka in 2017 providing market free access for local exporters to European countries will remain till 2023 but this continuation process will not be automatic.
This was reiterated by Ambassador Denis Chaibi, Head of the EU Delegation to Sri Lanka and the Maldives when he addressed the National Chamber of Exporters annual event in Colombo on Tuesday.
However he added that the government’s obligations to implement the commitments under 27 UN conventions towards regaining the GSP + will remain as well and will continue to be monitored by the EU.
Sri Lanka has now become an upper-middle income country in 2019, and thus reached a level of development that would mean it has to graduate out of the GSP+ scheme over time.
There is a 3-year transition period foreseen for the continuation of the EU facility, ending in 2023 and the strict monitoring process is being continued, he revealed.
The new status of Sri Lanka becoming this year an upper middle income country will mean that the country will lose the benefits of GSP+ sooner or later, possibly in three years’ time, he pointed out.
Essentially, EU uses trade as an incentive and its GSP and GSP+ regime does this.
The beneficiary Third World countries can develop, grow and take advantage of these schemes, while not putting their sensitive sectors and industries at risk.
“But there is no free lunch; benefits do not come without responsibilities. In exchange for this tariff-free access to the European market, countries must meet international standards in labour rights, environment and human rights,” he emphasised.
EU GSP+ is automatically lost if a country achieves ‘upper middle income’ status consecutively for three years. In July 2019 the country graduated to upper middle income status.
There has been impressive export growth in Sri Lanka in the months following the re-gaining of GSP+ in 2017 and in total, since its reinstatement, the country’s exports to the EU have increased by more than 20 per cent. Fisheries exports have literally doubled since the removal of the fish ban and regaining GSP+.
Other notable growth sectors include clothing, tea, tyres, gems as well as motor vehicle parts and footwear. These exports mainly come from big companies and not so much from SME’s.