Sri Lanka
USA
Canada
India
UK
UAE
Sri Lanka is facing tougher conditions in its bid to retain the European Union’s GSP+ trade facility beyond 2027, as the EU introduces a revised framework with expanded human rights and labour standards. The country, whose exports to the EU account for over 24% of total trade, is currently under review by EU authorities for the renewal of the preferential trade scheme.
The Generalised Scheme of Preferences Plus (GSP+) provides duty-free access to the EU market for developing countries that uphold 27 key international conventions on human rights, labour rights, environmental protection, and good governance. Sri Lanka regained this facility in 2017 after a seven-year suspension, but the new EU criteria will demand additional commitments.
Under the updated system, applicants must ratify and implement several more international conventions — including the Paris Agreement on Climate Change, the UN Convention on the Rights of Persons with Disabilities, and International Labour Organization (ILO) Conventions on tripartite consultations and labour inspections. Also required are adherence to the Optional Protocol on the Rights of the Child in Armed Conflict and the UN Convention against Transnational Organized Crime.
While Sri Lanka is expected to meet most of these obligations without major difficulty, the European Union has placed strong emphasis on the need to replace the controversial Prevention of Terrorism Act (PTA) with a counterterrorism law that aligns with international standards. The previous Anti-Terrorism Bill failed to satisfy EU expectations, and the current government has yet to finalise a new version despite earlier commitments to do so before the latest UNHRC session.
Repealing and replacing the PTA remains one of the key prerequisites for retaining the GSP+ facility. Losing it would significantly impact Sri Lanka’s economy, particularly since more than 80% of its exports to the EU — valued at €3.7 billion — currently benefit from tariff concessions, yielding a trade surplus of €1.5 billion.
Despite the challenges, diplomatic relations between Colombo and Brussels remain cordial. The most recent UNHRC resolution, backed by the EU, was notably softer in tone and passed without a vote, offering Sri Lanka some diplomatic breathing room. Against this backdrop, the government is expected to work closely with the EU to secure continued access to the GSP+ scheme beyond 2027.
