THE IMPACT OF GSP+ WITHDRAWAL ON SRI LANKAN ECONOMY
General System Preference - plus (GSP+) is a non-reciprocal trade agreement which focuses to enhance exports to its beneficiaries. Under GSP+, European Union (EU) became the major exporter of Sri Lanka in 2008 making a continuous trade surplus between EU and Sri Lanka. However, in 2010, EU has withdrawn GSP+ facility reducing Sri Lanka’s GSP level. The major objective of this study was to identify the European Union as an important trade partner to Sri Lanka under the GSP+ scheme and to evaluate performance of GSP+ in the different stages of the EU GSP programme in Sri Lanka. Primary data was used to analyze export environment of Sri Lanka without GSP + facility while the secondary data was used to analyze comparative performance of GSP+ within the pre and post GSP+ periods. According to the finding of paper live animals, footwear and stone products highly affected compared to textiles and garments due to GSP+ withdrawal.
Keywords: General System Preference Plus, European Union and Trade surplus
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