Sri Lanka Granted GSP Plus Status by EU

Already a regular inclusion on many apparel buyers order book, the Sri Lankan textile sector has been given a significant boost with the EU granting it GSP Plus (GSP+) status as of Friday.

Sri Lanka hope to build on the €1,824 million of textiles and clothing sold to the EU in 2016 with its newly-granted GSP+ status.

The European Commission, the legislative body of the European Union, has granted Sri Lanka better access to the EU for its exports.  It did so under the EU’s Generalised Scheme of Preferences starting Friday.

Being able to export more to the EU will help Sri Lanka’s economy develop and create more and better jobs for its people. workers

The GSP+ scheme is conditional on Sri Lanka advancing human and labour rights and working towards sustainable development.

The EU is Sri Lanka’s second-largest trading partner after India but its main export destination, absorbing 31% of Sri Lankan exports in 2015.

In January the EC had noted that it had received a GSP request from Sri Lanka. The EC said it examined the request from Sri Lanka and found that the country had met the conditions.

“Sri Lanka should therefore be granted GSP+ from the date of entry into force of this regulation,” the EC said. “The Commission should keep under review the status of ratification of the relevant conventions, the effective implementation of those conventions, as well as the cooperation with the relevant monitoring bodies by the government of Sri Lanka.”

A beneficiary country under the Generalised System of Tariff Preferences may request to benefit from additional tariff preferences under the special incentive arrangement for sustainable development and good governance, known as GSP+, for least developed countries that are considered vulnerable due to a lack of sufficient diversification and insufficient integration with the international trading system.

The GSP+ program offers enhanced preferences meaning full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to countries which ratify and implement core international conventions relating to human and labor rights, environment and good governance.

On the 27th April Sri Lanka won a vote in Brussels by 436 against and 119 in favour for a motion to deny them GSP+.

A group of EU parliamentarians had forwarded a motion to deny Sri Lanka access to GSP+, citing the slow pace of essential reforms in Sri Lanka.

The GSP lowdown

The EU’s “Generalised Scheme of Preferences” (GSP) allows developing countries to pay less or no duties on their exports to the EU.

It gives them vital access to EU markets and provides you with a cost-cutting opportunity by paying less (OR NO) duty, so make a point of regularly checking GSP availability for your sourcing regions and products.

There are three main variants of the GSP Scheme:

1. General GSP arrangement – offers generous tariff reductions to 30 developing countries.

Africa: Botswana, Cameroon, Cote d’Ivoire, Republic of Congo, Kenya, Ghana, Namibia, Nauru, Nigeria, Swaziland

Asia: Kyrgyzstan, India, Indonesia, Sri Lanka, Vietnam, Tajikistan, Turkmenistan, Uzbekistan

Australia and Pacific: Cook Islands, Fiji, Marshall Islands, Micronesia (Federate States of), Niue, Tonga

Europe: Ukraine

Middle East: Iraq, Syria

South America: Colombia, Honduras, Nicaragu

2. GSP Plus (+) –  removes tariffs on the same product categories as those covered by the general arrangement for 13 countries which have implemented core international conventions

Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Pakistan, Paraguay, Peru, El Salvador, Guatemala, Philippines.

3. Everything but Arms (EBA) grants duty-free quotas to all products for the 49 least developed countries (LDCs)

Africa: Angola, Burkina Faso, Burundi, Benin, Chad, Democratic Republic of Congo, Central African (Republic), Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau, Comoros Islands, Liberia, Lesotho, Madagascar, Mali, Mauritania, Malawi, Mozambique, Niger, Rwanda, Sierra Leone, Senegal, Somalia, South Sudan, Sudan, Sao Tome and Principe, Togo, Tanzania, Uganda, Zambia

Asia: Afghanistan, Bangladesh, Bhutan, Cambodia, Lao (People’s Democratic Republic), Myanmar/Burma, Nepal, Timor-Leste, Yemen

Australia and Pacific: Kiribati, Samoa18, Solomon Islands, Tuvalu, Vanuatu

Caribbean: Haiti.

GSP arrangements and products covered change regularly, so you should always check with us if uncertain.