EU assures GSP+ to continue till 2023

The EU is the second-largest trading partner in Sri Lanka after India but also its leading export destination, consuming 31 percent of Sri Lankan exports in 2015. Sri Lanka was the 62nd most significant trading partner for products in the EU in 2016, representing 0.1 percent of EU trade. Textiles and clothing dominate Sri Lanka's exports to the EU, accounting for over 80 percent of Sri Lanka's total exports to the EU in 2016. (Data Source: European Commission)

“The Comprehensive Scheme of Preferences Plus tax concessions from the European Union to Sri Lanka will continue until 2023,” said Prasanna Ranatunga, Minister of Industry, Export, Investment Promotion, Tourism, and Aviation.

Minister Ranatunga made that claim following a meeting at the Ministry on Sunday with Thorsten Bargfrede, Head of Economic, Trade and Communications Section of the European Union Delegation to Sri Lanka and the Maldives, and EU members.

The EU official promised at the meeting that the GSP+ concession would continue until 2023, and the related observation process would not change. During the conference, the Minister pointed out the GSP+ tax concessions given to the country's clothing industry, and that 60 percent of Sri Lankan clothing exports go to EU member states.

Minister Ranatunga noted that the garment industry accounts for about 43 percent of the country's total exports and earns about US$ 5 billion annually to the government. He said the apparel industry has grown exponentially and thanked the nations of the EU for their help in this area.

Noting that EU investors are keen to invest in Sri Lanka, Bargfrede has requested that the SriLankan Airlines resume flight services to EU countries. The minister responded to the matter, having already considered the request.

Also present at the discussion was Secretary of the Ministry of Industrial Export and Investment Promotion, Mapa Pathirana, and Secretary of the Ministry of Tourism and Aviation, Mrs. Marina Mohammed.

This strategy is in line with the governments' expectations via the budget to get more investors by offering incentives. The GSP+ concession will now be backed by the earlier proposed tax holidays for investors making large scale investments in the country. According to the Sri Lanka Apparel Exporters Association, they expect that securing GSP would bring in an immediate US$ 400 million to 500 Million to the Sri Lankan economy.

OSL Take:  The continuation of the US GSP trade facility for Sri Lanka, would boost Sri Lanka’s export market to the US. Sri Lanka already enjoys the EU’s GSP Plus trade concession. The benefits from these two trade concessions from two of the world’s largest markets would undoubtedly result in a boost in Sri Lankan exports to the US and the EU. Foreign businesses/investors could use the benefits of these trade concessions enjoyed by Sri Lanka to engage in an export business based in the island nation.

Also, the incentives for private sectors to construct mini industrial parks in areas such as Moneragala, Puttalam, Jaffna/Vanni, and Ampara will gain momentum through the value addition the GSP+ will bring to the country and by the opening of more product lines.

 VBS/AT/17022020/Z_TB6