Sri Lanka is preparing to reapply for trade concessions under the European Union's Generalised Scheme of Preferences Plus (GSP+), with the government aiming to secure continued preferential access to the EU market beyond 2027 under a revised 10-year framework.

Deputy Minister of Finance and Planning Prof. Anil Jayantha Fernando disclosed this in Parliament today (05), responding to a question raised by Member of Parliament Ravi Karunanayake under Standing Order 27(2).

According to the Deputy Minister, the European Union's renewed Generalised Scheme of Preferences (GSP) framework is scheduled to come into effect on January 1, 2027, and will remain in operation until December 31, 2036.

Under the new framework, countries currently benefiting from GSP+ concessions will be required to submit fresh applications to continue receiving preferential access to the European market. However, existing beneficiaries will be granted a transitional period until the end of 2028 to complete the reapplication process.

Sri Lanka is planning to submit its application within the period from January 1, 2027, to December 31, 2028, with the government working towards meeting the requirements necessary to retain its GSP+ status, the Deputy Minister confirmed.

GSP+ benefits and eligibility requirements

The GSP+ is a special incentive arrangement under the EU's Generalised Scheme of Preferences designed to support vulnerable developing countries by providing preferential access to the European market in return for commitments towards sustainable development and good governance.

Under the arrangement, 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 continue to require beneficiary countries to demonstrate their commitment to these international conventions, including maintaining their ratification, ensuring effective implementation and meeting relevant reporting obligations.

To qualify for GSP+, countries must also meet the EU's vulnerability criteria relating to a lack of export diversification.

Under this requirement, the value of EU imports from 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 respective country over a three-year period.

Duty-free access to approximately 66% of EU tariff lines

One of the key advantages of GSP+ is the substantial reduction in import duties on eligible exports to the European Union.

Beneficiary countries receive complete suspension of customs duties on products covering approximately 66% of all EU tariff lines, including sensitive products, subject to specified exceptions.

These concessions provide preferential market access for eligible exports and are particularly relevant to developing countries seeking to strengthen their international trade and export competitiveness.

Monitoring and compliance under the new framework

The European Union monitors the effective implementation of the 32 international conventions and compliance with related reporting requirements by GSP+ beneficiary countries.

The monitoring process includes engagement with national authorities and relevant stakeholders, as well as monitoring missions to beneficiary countries.

The EU also considers reports from the International Labour Organization (ILO) and the United Nations, together with information gathered through engagement with civil society organisations.

The findings are presented in a joint report by the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to the European Parliament and the Council. These reports are published every three years.

Under the renewed framework, greater emphasis will be placed on effective implementation and continuous progress in meeting international commitments.

For GSP+ beneficiaries, this will involve structured engagement and action-oriented monitoring aimed at encouraging sustained reforms.

Furthermore, countries applying for GSP+ status will be required to submit a forward-looking action plan outlining how they intend to implement the 32 relevant international conventions.

Graduation from the GSP+ arrangement

The revised framework also sets out conditions under which a beneficiary country may cease to receive GSP+ benefits.

Unlike countries receiving Standard GSP benefits, GSP+ beneficiaries are not subject to the graduation mechanism that removes preferential treatment for specific product groups.

However, a country will leave the GSP+ arrangement if it obtains an agreement providing preferential market access or exceeds the World Bank's definition of a low-income or lower-middle-income country for three consecutive years.

Government explores long-term trade arrangements with EU

Meanwhile, the government is expected to examine longer-term options to strengthen the country's access to the European market through deeper economic cooperation or a possible trade agreement with the European Union, the Deputy Minister of Finance and Planning, Prof. Anil Jayantha Fernando said.

The government is therefore working towards securing continued GSP+ eligibility under the revised framework while also considering alternative arrangements to strengthen Sri Lanka's long-term trade relationship with the EU.

The new 10-year GSP framework, which takes effect on January 1, 2027, will provide the basis for the next phase of preferential trade arrangements between the European Union and eligible developing countries.

For Sri Lanka, successfully completing the reapplication process and meeting the updated eligibility and compliance requirements will be important in maintaining preferential access to the European market and supporting the country's export sector., the Deputy Minister added.