GSP+ UNDER THE EU SPOTLIGHT

Tamara Rebeira reports on the EU-Sri Lanka Joint Commission partnership

The 26th session of the Joint Commission between Sri Lanka and the EU was held in Brussels on 22 February, marking a significant juncture in a longstanding partnership. At the forefront of discussions was the Generalised Scheme of Preferences Plus (GSP+) – a pivotal topic of interest especially for Sri Lanka.

Prior to the session, the EU-Sri Lanka Working Group on Trade and Economic Cooperation convened virtually on 6 February, providing an opportunity for both parties to evaluate progress.

Sri Lanka presented plans to gradually remove the remaining import restrictions, considering the prevailing economic circumstances; it proposed the establishment of a national single window for trade facilitation.

The European Union provided updates on its efforts to revise GSP, anticipating that beneficiary countries like Sri Lanka would seek continued trade preferences under the revised legislation. Sri Lanka in turn acknowledged the EU’s confirmation of the continuation of the GSP+ scheme for exports to the European market.

Additionally, the EU emphasised the importance of ongoing monitoring for GSP+ compliance. Both parties seized the opportunity to reaffirm their commitment to engagement through the EU-Sri Lanka Investors’ Dialogue, which was scheduled for the first quarter of 2024.

After losing its Generalised Scheme of Preferences Plus status in 2010 due to alleged human rights abuses following the civil conflict, Sri Lanka regained the concessionary scheme in May 2017. To meet the GSP+ requirements, the country ratified all 27 core international conventions on human rights, labour standards, environmental protection and good governance.

The EC’s assessment report on the EU’s GSP last year revealed serious abuses by several beneficiary govern­ments including Sri Lanka. Human Rights Watch (HRW) noted that GSP+ benefits were reinstated on the basis of promises of human rights reform, which have yet to materialise.

HRW highlighted that the EU consistently and publicly raised specific concerns regarding ongoing legislative processes in Sri Lanka – especially with the crackdown on protesters in 2023 – in particular, it called for the need to reform the Prevention of Terrorism Act (PTA).

It was also made clear that concrete progress is expected from Sri Lanka to maintain its GSP+ status.

When Sri Lanka lost its GSP+ status in 2010 due to non-compliance with three crucial international conventions, the closure of 25 apparel factories and a loss of nearly 10,000 jobs followed.

Last year, the European Commission noted that as one of Sri Lanka’s largest trading partners, nearly 3.2 billion euros worth of Sri Lankan exports reached EU markets in 2022.

The significance of GSP+ cannot be overstated; GSP+ is a testament to the intricate dance of diplomacy and economics where Sri Lanka’s commitment to governance, human rights and environmental standards could yield tangible benefits.

During the meeting in Brussels, in addition to GSP, both parties exchanged perspectives on all aspects of EU-Sri Lanka bilateral relations, fostering an atmosphere of cooperation and mutual respect.

Sri Lanka briefed the EU on its progress in economic stabilisation and recovery efforts over the preceding year. Acknowledging Sri Lanka’s commitment, the EU recognised the nation’s endeavours towards ensuring sustainable, inclusive and equitable economic growth.

In the light of economic hardships and having lifted its head, the EU extended congratulations on the country’s rapid economic recovery and optimistic growth prospects.

And Sri Lanka confirmed that the presidential election will adhere to constitutional mandates while the European Union expressed its readiness to deploy an EU Election Observation Mission (EOM) upon Sri Lanka’s invitation.

The Sri Lankan delegation also informed the EU about its voluntary undertaking of the IMF Governance Diagnostic Assessment (GDA) – and that a GDA-based government action plan was unveiled recently. This is expected to demonstrate the government’s commitment to building a sustainable economy and establishing good governance.

Concluding the discussions, both delegations agreed to convene for the next session of the EU-Sri Lanka Joint Commission in Colombo in 2025.