EU envoy urges swift global integration to avoid Sri Lanka falling behind regional peers

Denis Chaibi
PIC BY KITHSIRI DE MEL

By Shabiya Ali Ahlam
European Union (EU) Ambassador to Sri Lanka Denis Chaibi this week emphasised the urgent need for Sri Lanka to expedite its efforts in enhancing global integration, as the country could significantly lag behind its regional peers, if it were to lose access to the GSP Plus scheme. 

Chaibi pointed out that integrating Sri Lanka into key markets at present is GSP Plus and neglecting to seize this opportunity could place the country at a significant disadvantage. 

“Sri Lanka has to start thinking about the strategy for its future beyond six, seven years, in terms of trade, because at the moment, the strategy relies on elements that will no longer be valid in six years, whereas the rest of the world is moving faster,” Chaibi told a breakfast meeting organised by the Ceylon Motor Traders Association in Colombo, on Tuesday.

South Asia is one of the least integrated regions in the world, in terms of trade and Sri Lanka not having enough free trade agreements (FTAs) under its belt does not help its position. 

Sri Lanka has signed FTAs with India, Pakistan and Singapore and is currently negotiating an FTA with Thailand. But none of these agreements can be considered “deep”, according to Chaibi.

Hence, he pointed out that once Sri Lanka is out of GSP Plus, the island nation would face limited market access, due to the absence of comprehensive trade arrangements.

Sri Lanka’s competitors such as Vietnam and Bangladesh have much better market access through a vast array of bilateral and multilateral trade agreements. 

With the European Commission recently proposing a four-year extension to the current GSP Plus scheme until December 31, 2027, Sri Lanka will not lose its preferential access to the EU in the interim. 

The proposed extension is due to the ongoing negotiations between the co-legislators of the EU, regarding the new GSP Plus arrangement. The extension of the tariff facility will grant Sri Lanka continued access to the EU markets under the current set up, until 2027.   The EU was expected to adopt a new cycle of the EU GSP regulation for 2024-2033, which was slated to come into effect from January 1, 2024, for the next 10 years.