EU Suggests Sri Lanka To Grow With GSP+


Charge d’ Affaires of the EU Delegation to Sri Lanka and the Maldives, Thorsten Barfrede on Monday said, GSP+ has worked well for Sri Lanka since its resumption in 2017; However, GSP+ still offers great future potential for Lankan companies as the GSP+ utilization rate is still relatively low. “We hope that this will improve in the future.”

“There has been impressive export growth in the months following the re-gaining of GSP plus in 2017. Sri Lanka’s exports to the EU have since then increased by more than over 20% until now. Fisheries exports have literally doubled in the first year since the removal of the fish ban and regaining GSP +,” Barfrede told a seminar on ‘Sri Lanka’s Exports to the EU: Impact of GSP plus’ in Colombo.

Barfrede made a few suggestions for Sri Lanka to grow with GSP+ concessions and to strengthen EU – Sri Lanka trade ties in the future. First, he said, there are opportunities in producing higher quality goods for Sri Lanka to stay competitive in the global arena. “Many countries can produce cheaper, but price is not the only way to stay competitive. Quality is another one.”

Compared with many other countries in the region Sri Lanka has a high compliance in labour and environmental standards, Barfrede noted.

“Sri Lanka can make this a competitive advantage. Sri Lanka could move further towards sustainable production concepts such as organic produce, green production trade practices. Such practices are highly valued by consumers around the work in the EU. And they are ready to pay a premium price for such products. We have already seen some encouraging examples GSP+ helps in this,” Barfrede said.

Diversification is yet another area for improvement. “Statistics show us that Sri Lankan exports are still very much focused on traditional sectors. Apparels alone accounts for 60% of Sri Lanka’s exports to the EU,” Barfrede said. To take the full advantage of GSP+ opportunities, the EU had made available over 8 million euro and launched in 2017 a trade assistance project, implemented by our partners UNIDO and ITC. One of the key objectives is to support the national export strategy and open up new export sectors.

The project also supports trade policy development and regulatory reforms, enhancement of Sri Lanka’s WTO trade negotiations capacity, support Sri Lanka’s regional integration process and help Sri Lanka maximize the use of the EU GSP+ scheme.

Barfrede also said Sri Lanka needs to look beyond export promotion. There are other links with investments and the overall business environment. “Investors can bring not only capital, increase production but also bring know-how. We have been working closely with the Sri Lankan government over the past year to remove obstacles our investors encounter.”

“For example, in collaboration with the EU Delegation and the European Chamber of Commerce, we have a regular EU-Sri Lanka Investor Dialogue. This Dialogue, which has met on a quarterly basis since January 2017, provides a platform to discuss impediments to trade and investments faced by EU companies – in their presence and in the presence of competent ministries – so that the government can find quick solutions,” he said.

Barfrede’s fifth suggestion was to ‘stay open to business’. “Putting tariffs up to protect this or that sectors is just not an adequate course of action if you want to stay competitive as a country. It often seems the politically easiest response to simply raise tariffs or use other measures to protect a sector under stress. This never works in the long run. Without feeling market pressure, productivity goes down. Lanka has a great opportunity to further develop its position as a regional trading hub and major trans-shipment centre. Closing your borders to imports and competition will not help.”

Barfrede said, “We already see that major nations in the world start moving towards protectionist measures. Trade wars are in nobody’s interest. As EU we firmly support – and will defend – the multilateral trading system, with the WTO at its core.”

2 thoughts on “EU Suggests Sri Lanka To Grow With GSP+

  • September 9, 2019 at 9:04 pm

    Shocking to see ‘Human Rghts’ is NOT mentioned even once. Now, Business is always coupled with Human Rights. Sri Lanka has been vioating the human rights of its ethnic minorities for 71yrs – before, during and after, the war. Since the end of the war there has been NO political solution and NO economic development in the North which has only been hyper-militarised since the end of war. Army website speaks of Psychological Operations on the population to change their mindset. If this happens in North Korea the whole world would be up in arms.

  • September 12, 2019 at 9:06 am

    In Sri Lanka there is a virtual border between the South and the North: when the World Bank says Sri Lanka is now an upper-middle income country, it refers to the South ruled by the elcected President and parliament; the North is virtually ruled by the Army: there are Security Forces Headquarters in each of the five districts of the Northern Province. The Army that has grabbed huge swathes of land since the end of war and has been giving ”presents” to school children and ”poor people” = anti-SustDev in this age of SDGs(Agenda2030).


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