European Commission Directorate-General for Trade

Sri Lanka

The EU is Sri Lanka's largest export destination, absorbing two fifths of its exports.

Sri Lanka has benefited from the GSP+ preferential trade system, which offers specific incentives for countries having ratified and effectively implemented certain conventions on sustainable development and good governance. A comprehensive investigation has been initiated by the European Commission in October 2008 to examine Sri Lanka's compliance with the obligations of the GSP+, in particular its respect to three international human rights conventions.  The investigation drew on expert external advice and confirmed substantive shortcomings in the effective implementation by Sri Lanka of three UN human rights conventions forming part of the substantive qualifying criteria for GSP+ benefits (the International Covenant on Civil and Political Rights, the Convention against Torture and the Convention on the Rights of the Child). Following this investigation, the Council of the European Union decided on 15 February 2010 to temporarily withdraw GSP+ benefits from Sri Lanka which will take effect on 15 August 2010. Sri Lanka would continue to benefit from the GSP scheme.

The European Commission remains committed to supporting Sri Lanka in its efforts to tackle the challenges it faces in terms of human rights, reconstruction and reconciliation and is ready to continue a dialogue on the necessary steps to bring the country into compliance with the relevant international conventions so that Sri Lanka again becomes eligible for GSP+ benefits in the future.

Overall cooperation framework with Sri Lanka

Co-operation between the EU and Sri Lanka dates back from 1975 when the European Commission and the Government of Sri Lanka concluded a Commercial Co-operation Agreement. Today relations are governed by a "third generation" Co-operation and Partnership Agreement which came into force in April 1995. In order to ensure a smooth functioning and implementation of the Agreement the two parties meet regularly in the format of a Joint Commission. The EC–Sri Lanka Joint Commission normally meets every year, alternately in Brussels and Colombo. The EC–Sri Lanka Joint Commission normally meets every year, alternately in Brussels and Colombo. The 17th session of the EC-Sri Lanka Joint Commission took place in Colombo in June 2008 and the next meeting is expected to take place in Brussels in 2010.

Sri Lanka and GSP+

The Decision to withdraw GSP+ from Sri Lanka is based on the findings of an exhaustive Commission investigation launched in October 2008 and completed in October 2009. This investigation relied heavily on reports and statements by UN Special Rapporteurs and Representatives, other UN bodies and reputable human rights NGOs. These reports identified significant shortcomings in respect of Sri Lanka's implementation of three UN human rights conventions – the International Covenant on Civil and Political Rights (ICCPR), the Convention against Torture (CAT) and the Convention on the Rights of the Child (CRC).

GSP+ relies on beneficiary countries' continuing to respect the substantive eligibility criteria for the scheme. If this no longer is the case, the relevant EC Regulation foresees that the Commission should undertake an investigation to clarify the situation, and then, in the light of its findings, take appropriate action either to confirm the continuation of GSP+ benefits or to propose to EU Member States in the Council that they be temporarily withdrawn. In the case of Sri Lanka the findings of the investigation has led the Council to adopt the temporary withdrawal Decision on 15 February 2010.

Sri Lanka is a major beneficiary of the trading opportunities offered by GSP+. In 2008, EU imports from Sri Lanka under GSP+ totaled € 1.24 billion. The most important import products benefiting from these trade preferences were T-shirts and other clothing items, as well as fisheries products. After temporary withdrawal of GSP+ benefits takes effect on 15 August 2010, EU imports from Sri Lanka will continue to benefits from to standard GSP preferential treatment. Thus, Sri Lanka would still enjoy preferential access to the EU market for its key export items such as clothing that is at least as generous as it enjoys in other major developed country markets.

More information on Generalised System of Preferences.