Japan GSP Plus facility for Sri Lanka under review for extension: report
The Annual Report of the Central Bank of Sri Lanka (CBSL) for 2020 has reportedly stated that with the GSP Plus scheme provided by Japan to Sri Lanka being expired on 31 March this year, further extension of the scheme is being reviewed at the moment.
The Generalised System of Preferences (GSP) was introduced by the General Agreement on Tariffs and Trade (GATT) to grant Autonomous Trade Preferences to all developing countries or the least developed countries by the developed countries or the industrialised countries as per the instructions of United Nations Conference on Trade and Development (UNCTAD).
The GSP facility provided by Japan to Sri Lanka grants preferential tariffs under the Temporary Tariffs Measures Law and the facility was granted from 1 August 1971 onwards, The Morning has reported.
According to the Embassy of Sri Lanka in Japan, under its GSP scheme, Japan had introduced measures such as expanding the product coverage of tariff-free and quota-free treatments for goods from Least Developed Countries (LDC).
Tea, coconut non-kernel products, food, beverages and tobacco, rubber products and chemical products are among the major export products to Japan and the value of exports under the Preferential Trade Agreements of Sri Lanka is US$ 71 million, the news report has stated.
Also, Japan’s simple average GSP tariff rate is 4.9% in the Financial Year (FY) 2012. Accordingly, the preferential tariff is granted for certain agricultural, fishery and industrial products.
In addition, according to the CBSL report, Sri Lanka benefits from Russia, Turkey, Australia, Canada, Switzerland, Norway and New Zealand and the UK’s Global Tariffs (UKGT).
According to reports, under the Free Trade Agreements (FTAs), Sri Lanka was benefited from bilateral FTAs such as the Indo-Sri Lanka Free Trade Agreement (ISFTA) and the Pakistan-Sri Lanka Free Trade Agreement (PSFTA) till 2020. Total exports had remained high from both India and Pakistan.
In the case of regional trade agreements, the Asia Pacific Trade Agreement (APTA) and Global System of Trade Preferences (GSTP) had reportedly improved in 2020, whereas exports under the SAARC Preferential Trading Arrangement (SAPTA) and the South Asian Free Trade Area (SAFTA) had remained low in 2020.
Sri Lanka already enjoys GSP Plus and GSP trade concessions from the EU and US respectively. The country also enjoys several trade agreements with countries in the Asian region. Sri Lanka therefore has the advantage of all these trade agreements when engaging in business ventures. Foreign businesses/investors could look at setting up base in Sri Lanka to engage with other countries utilizing the special trade benefits enjoyed by the island.
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