• EU extends existing GSP+ scheme due to lack of consensus on new proposal
• SL in compliance with 5 additional conventions under proposed framework
• Rubber exports unlikely to be impacted by new EU deforestation regulations
• GSP+ allows duty-free access to EU for over two-thirds of tariff lines

Sri Lanka will continue to enjoy benefits under the Generalised Scheme of Preferences Plus (GSP+) until 2027 and appears to be in compliance with the requirements of the proposed new GSP scheme, the Department of Commerce reveals.

Speaking to The Sunday Morning Business, a high-ranking source from the Department of Commerce said that in 2021, the European Commission had adopted the legislative proposal for the new GSP scheme for the 2024-2034 period. 

However, as the European Parliament, European Council, and European Commission were unable to reach a consensus with regard to the draft proposal, the existing GSP scheme was extended until December 2027.

The source further stated: “The trialogue negotiations among the European Parliament, Council, and Commission on the draft proposal did not reach a consensus. As a result, the European Commission submitted a proposal to extend the existing GSP scheme until December 2027 as a temporary measure, which was approved by the European Council and the European Parliament. 

“The amendment was published in the official journal of the European Union (EU) on 27 November 2023 and the regulation entered into force the following day.”

It was further revealed that the proposed GSP scheme had recommended expanding the list of international conventions that needed to be complied with under the GSP+ facility by adding five new conventions. According to the source, Sri Lanka had already ratified the five additional conventions. 

The proposed new GSP scheme also suggests the introduction of the possibility to withdraw GSP+ benefits for serious and systematic violations of principles of the conventions on climate change and environmental protection.

Therefore, following the adoption of the new EU Regulation on Deforestation-free Products (EUDR) in June 2023, it has become necessary for Sri Lanka’s rubber exports to prove that the relevant products do not originate from recently deforested land or contribute to forest degradation.

However, the source pointed out that it was unlikely that Sri Lanka would be affected by the EUDR “because we have not cut down any trees recently, after 2022, in order to plant rubber trees”. 

The standard GSP scheme is offered to low- and lower-middle-income countries on a non-reciprocal basis. This means a partial or full removal of customs duties on two-thirds of tariff lines (approximately 66.7% of tariff lines). 

Meanwhile, the GSP+ scheme is a special incentive arrangement for sustainable development and good governance. 

GSP+ slashes the same tariffs to 0% for vulnerable low- and lower-middle-income countries that implement 27 international conventions related to labour and human rights, environmental and climate protection, and good governance. Sri Lanka became a beneficiary of the GSP+ scheme from 2005-2010 and from May 2017 up to now.