A joint staff working document published by the EU Council on 16 July 2026 assesses Sri Lanka's compliance with the Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+) for the 2023-2025 period, finding progress but persistent deficiencies that could affect its continued eligibility for tariff preferences worth an estimated EUR 139 million in 2024. The assessment accompanies the Joint Report to the European Parliament and the Council on the Generalised Scheme of Preferences covering the same period.
Sri Lanka is the third largest GSP+ beneficiary, with imports using GSP+ preferences totalling EUR 1.5 billion in 2024 and a utilisation rate of 68.9%. The new government elected in September 2024 advanced anti-corruption efforts and committed to repealing the Prevention of Terrorism Act (PTA) and reforming the Online Safety Act. On labour rights, child labour was reduced but issues remain on freedom of association in Free Trade Zones and collective bargaining. Key concerns include slow reconciliation and accountability, continued use of the PTA for arrests, high sexual and gender-based violence, and discrimination against ethnic/religious minorities and LGBTIQ+ persons. Sri Lanka has ratified all 27 conventions but reporting delays persist for several human rights treaties. Cyclone Ditwah in November 2025 negatively impacted the fragile socio-economic situation.
The assessment carries significant implications for stakeholders. Sri Lankan exporters benefit from preferential access to the EU market, with tariff savings of EUR 139 million in 2024, but face potential loss of preferences if compliance gaps are not addressed by 2027 under revised GSP rules. EU importers and retailers relying on Sri Lankan textiles and other goods may face higher costs or supply chain disruptions. The Sri Lankan government must urgently address human rights, labour, and anti-corruption gaps to maintain eligibility. EU civil society groups monitoring human rights will scrutinise progress on PTA repeal and minority protections. The assessment sets the stage for the European Parliament and Council to consider the GSP+ renewal, with a decision expected before the current scheme expires.