EU Tightens GSP+ Requirements, Sri Lanka Faces Pressure to Reform

The European Union (EU) is set to introduce stricter guidelines for its Generalized Scheme of Preferences Plus (GSP+) trade arrangement, effective from 2027, placing increased pressure on Sri Lanka to fulfill critical obligations, diplomatic sources reveal.

A delegation from the EU is expected to visit Sri Lanka at the end of next month, heightening the urgency for the government to address key concerns. These include the long-awaited repeal of the Prevention of Terrorism Act (PTA), amendments to the Online Safety Act, and significant improvements in anti-corruption measures.

The GSP+ scheme, which provides zero tariffs for eligible low and lower-middle-income countries, is undergoing a significant revision. Under the new guidelines, compliance with all 27 international conventions related to labor and human rights, environmental and climate protection, and good governance will become mandatory.   

Crucially, the EU is introducing a mechanism for the rapid withdrawal of GSP+ benefits if beneficiary countries fail to meet their obligations. A two-year transitional period will be granted for countries to ratify newly added conventions, and they will be required to submit detailed implementation plans for all conventions.   

The EU has explicitly stated that the PTA in its current form is unacceptable. Furthermore, the new system emphasizes good governance, demanding robust measures to combat corruption, prevent bribery, and ensure transparent public tender procedures.

Sri Lanka previously lost its GSP+ status and regained it in 2017 with a commitment to repeal the PTA. The current trade volume between Sri Lanka and the EU stands at US $3.2 billion, with a trade balance favorable to Sri Lanka, highlighting the economic importance of the GSP+ agreement.   

The need to comply with the European Unions requirements are becoming increasingly important for Sri lanka.