SRI LANKA AND THE EU’s GSP

Economic Impact

Sri Lanka's economy can be considered vulnerable and stands with a score of 2.6%, noticeably below the threshold of 7.4%. Sri Lanka's economy is mostly concentrated on a small bandwidth of products, which is reflected in the diversification score. The country's diversification percentage stood at 92.3% (2019) with the minimum diversification threshold standing at 75%.

Sri Lanka's preference utilisation rate showed a downward trend until 2017 and only increased in 2018, when Sri Lanka was granted GSP+ preferences again after they had been revoked in 2010. In 2022 65.8% of eligible imports make use of the reduced tariffs granted under the GSP, which is considerably below the average of other GSP+ countries. Thus, there is room for improvement particularly given that that about 85% of imports from Sri Lanka are eligible for GSP+ preferences. The low overall preference utilisation rate can be partly explained by the small share of preferential imports in the apparel sector. Only half of eligible apparel imports make use of the reduced duties granted to GSP+ beneficiaries. A number of product sections, however, made increasing use of the preferential market access. These include fish and crustaceans, cereals, grains and seeds, fabrics and footwear and headgear.

The largest product sections under the GSP+

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

Sri Lanka ratified 27 core conventions on human rights, labour rights, environmental protection, and good governance. Sri Lanka maintained ratification of all relevant conventions throughout the reporting period 2018-2019. A number of reports will be due later in 2020. Overall, Sri Lanka is compliant with its reporting obligations, despite a number of late submissions. A number of reports, particularly regarding the reporting on environmental conventions, are still outstanding.

Monitoring priorities during the reporting period 2018-2019

During the reporting period 2018-2019, the EU focussed its monitoring activities on six priority areas and engaged in an intensive dialogue with government authorities in Sri Lanka. Overall, Sri Lanka made progress in a number of areas related to human rights, child labour, corruption and drug trafficking. Some challenges remain regarding the effective implementation of the conventions.

1. HUMAN RIGHTS

Sri Lanka has ratified all human rights conventions covered under the GSP+ regulation as well as additional three conventions which are considered as core human rights treaties by the UN. According to the most recent GSP report, which covers the period 2018-2019, Sri Lanka made notable progress regarding its human rights situation. This includes extended space for civil society and media, stronger cooperation with the UN on the prevention of torture as well as progress regarding reconciliation, transitional justice, and accountability. Furthermore, the government has taken legal steps to further prevent domestic violence and the sexual exploitation of children, which also includes better support provision and awareness-raising activities. These efforts where complemented by the set-up of responsible institutions and oversight bodies. However, some political reforms have raised concerns such as the reform of the executive Presidential system and the Prevention of Terrorism Act which can pose a threat to democracy and justice, and, thus, jeopardises overall compliance with relevant human rights conventions such as ICCPR and CAT. Additionally, the situation for minorities worsened in the aftermath of the terrorist attacks on Easter Sunday 2019.

Ratified

• Convention on the Prevention and Punishment of the Crime of Genocide (1948)
• International Convention on the Elimination of All Forms of Racial Discrimination (1969)
• International Covenant on Civil and Political Rights (1976)
• International Covenant on Economic, Social and Cultural Rights (1976)
• Convention on the Elimination of All Forms of Discrimination against Women (1981)
• Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
• Convention on the Rights of the Child (1990)

2. LABOUR RIGHTS

Sri Lanka has ratified all 7 ILO conventions required by GSP+ and has additionally ratified three of the four ILO priority conventions. This also includes the convention on the rights of migrant workers, which is of particular importance in light of the country's labour shortages. Over the reporting period, Sri Lanka made significant progress in eliminating child labour, which was reduced to 1% of the children population. Challenges remain in effectively implementing the conventions on the elimination of discrimination due to the absence of a sound anti-discrimination law. This also relates to the position of women in the labour market, who remain underrepresented and are often paid less. The Decent Work Country Programme offers the opportunity to strengthen trade union rights. Currently, there are still reports of cases of anti-union discrimination and unfair union practices. Additionally, the ILO reports complications in inspecting labour rights in Sri Lanka's Free Trade Zones.

Ratified

• Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) 
• Right to Organise and Collective Bargaining Convention, 1949 (No. 98) 
•  Forced Labour Convention, 1930 (No. 29)  (and its 2014 Protocol )
• Abolition of Forced Labour Convention, 1957 (No. 105) 
• Minimum Age Convention, 1973 (No. 138) 
• Worst Forms of Child Labour Convention, 1999 (No. 182) 
• Equal Remuneration Convention, 1951 (No. 100) 
• Discrimination (Employment and Occupation) Convention, 1958 (No. 111) 

3. ENVIRONMENTAL PROTECTION

Sri Lanka has ratified all conventions covered by GSP+ and is committed to the related obligations. Furthermore, Sri Lanka has ratified the Kigali Amendment to the Montreal Protocol and the Paris Agreement. Some challenges with the effective implementation of the convention remain. Sri Lanka is an important regional advocate against poaching but the country's domestic policies to effectively implement the convention on wildlife trafficking (CITES) remain insufficient. Furthermore, Sri Lanka has strong regulations on hazardous waste but currently no facilities for its disposal.

Ratified

• Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
• Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
• Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (1989)
• Convention on Biological Diversity (1992)
• United Nations Framework Convention on Climate Change (1992)
• Cartagena Protocol on Biosafety (2000)
• Stockholm Convention on persistent Organic Pollutants (2001)
• Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)

4. GOOD GOVERNANCE

Sri Lanka shows strong commitment in tackling challenges related to corruption and introduced an Anti-corruption Strategy for the period 2019-2023, which inter alia includes an asset declaration system and the appointment of integrity officers. Likewise, Sri Lanka remains committed to the principles covered by the conventions on drug use and trafficking and was able to confiscate substantial amounts of illegal drugs which mainly originated from India and Pakistan. In addition, the government has put in place prevention and rehabilitation programmes to prevent abuse and provide treatment. This is of particular importance given Sri Lanka's increasing drug problem. In the public debate there are repeated calls for an implementation of the death penalty for drug trafficking which are strongly condemned by the UN Office on Drugs and Crime and the EU.

Ratified

• United Nations Single Convention on Narcotic Drugs (1961)
• United Nations Convention on Psychotropic Substances (1971)
• United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
• United Nations Convention against Corruption