A Top European Commission official highlighted areas of possible changes underway in the generation of European Union (EU) GSP+ preference by introducing more scrutiny to supply chains and sustainable development principles, whilst underscoring the benefits and optimal utilisation for economic growth.
“GSP+ is an incentive, it is not a reward. The EU is assessing countries that are making a huge effort to meet these obligations. There will be modifications to the proposal. There will be additions and removals.
The trajectory of the beneficiary States will be assessed and a decision will be made,” European Commission Directorate General for Trade Senior Advisor on Sustainable Development Nikoloas Zaimis said yesterday.
He made these remarks at a webinar titled ‘The future of EU GSP+ and its benefits’ organised by the European Chamber of Commerce of Sri Lanka (ECCSL) and the European Union (EU).
“Noting that the proposal has been presented two weeks ago to renew the program for another 10 years, from 2024 to 2034, he said the proposal will be discussed with the political institutions that are responsible for legislating in the EU.
“Next year, there will be discussions on the program, and hopefully by the end of next year, we will see the new program in a legislative publication," he said.
Describing GSP+ as the flagship unilateral preferences instrument, he said the program is considered successful with the responses and growth they have seen in the beneficiary economies over the years.
Although Sri Lanka has shown a significant growth in its exports to the EU with over Euro 2.3 billion, Zaimis said the full potential of the program was not exploited.
“The competitive advantage offered by the GSP+ to access the EU market is remarkable. But we notice that Sri Lanka is only using 60% of it. It is a pity because other beneficiaries have fully exploited the program to over 90% of the potential and eligible exports,” he said.
He said they are looking into the reasons to see if this is due to rules of origin, technical standards or lack of productive capacity.
Zaimis said legal stability and long-term approach to the program will help Sri Lanka to fully exploit the full potential of the program, whilst diversifying and moving up the industrialisation.
“We don’t want beneficiaries to be locked in as commodities exporters. Companies’ due diligence across their supply chain and production facilities is very important. Industrialise and move into new areas, whilst the long-term commitment to respect the international conventions,” he said.
He also pointed out that being eligible to the EU GSP+ gives a direct impression to potential investors keen on investment opportunities in Sri Lanka.
“The GSP+ really established a relationship of trust. Beneficiary countries commit to respect certain basic norms in protection of the labour, human and environmental laws. By investing in a country that has access to the EU market, they too get the competitive advantage for a long period of 10 years,” he added,
Zaimis also highlighted the importance of raising awareness of the GSP+ program locally, particularly within the SMEs.