Sri Lanka is entering a crucial period in its effort to preserve preferential access to the European Union market, with new GSP+ rules due to take effect next year and stricter conditions likely to place greater pressure on the Government to demonstrate progress on human rights and governance.
The European Union’s revised Generalised Scheme of Preferences framework will come into force in 2027. Existing beneficiaries, including Sri Lanka, will be required to qualify under the revised criteria, although they have until the end of 2028 to submit their applications.
The change is significant because GSP+ is not simply a trade arrangement. The facility provides enhanced tariff preferences to developing countries that ratify and effectively implement a range of international conventions covering human rights, labour rights, environmental protection, climate change and good governance.
Under the existing arrangement, beneficiary countries are required to implement 27 international conventions. The revised framework expands the number of relevant conventions to 32 and introduces stronger requirements relating to sustainable development and the implementation of international commitments.
Sri Lanka’s future under the scheme will therefore depend not only on its export performance but also on how convincingly it can demonstrate compliance with the conditions attached to the facility.
The European Union’s latest assessment of Sri Lanka, covering the period from 2023 to 2025, highlights several areas requiring continued attention. Among them is the country’s record on the death penalty.
Sri Lanka has maintained a de facto moratorium on executions since 1976. However, courts continue to hand down death sentences. The Ministry of Justice reported that 817 people were on death row in September 2025.
The EU has called for the establishment of a formal moratorium on executions with a view to the eventual abolition of capital punishment.
That position could become particularly important following the Government’s recent decision to consider the reintroduction of capital punishment. Although such a decision would not automatically result in the withdrawal of GSP+, it could create serious concerns during the country’s future assessment under the revised scheme.
The economic stakes are considerable.
EU imports from Sri Lanka were valued at approximately €2.64 billion in 2024. Products benefiting from GSP+ preferences accounted for about €1.52 billion of that trade. The preferential treatment provided an estimated €139 million in tariff savings for Sri Lankan exporters.
The European market is particularly important for the apparel sector, which remains Sri Lanka’s largest export industry. Rubber products, food products, machinery and other manufactured goods also contribute significantly to exports to Europe.
However, Sri Lanka’s exports to the EU have faced a decline in recent years. EU imports from Sri Lanka fell from approximately €3.2 billion in 2022 to €2.64 billion in 2024.
The new GSP+ framework therefore comes at a sensitive moment.
Sri Lanka must now balance domestic policy decisions with the international commitments that underpin its preferential access to the European market.
For the Government, retaining GSP+ will require more than securing favourable trade terms. It will require convincing the EU that Sri Lanka remains committed to the human-rights, labour, environmental and governance standards on which the facility is based.
The decisions taken before Sri Lanka applies under the revised system could ultimately determine the future cost of exporting to one of its most important international markets.