The United States announced that from January 1 2018, Sri Lanka will not receive any preferential duties under Generalized System of Preferences (GSP) program.
In a press release today, the US Embassy in Colombo said that in the case of Sri Lanka, “the United States Congress did not re-authorize GSP before adjourning for the year”.
“The immediate effect of GSP expiration is GSP eligible imports to the United States from Sri Lanka and other GSP beneficiary countries and territories will be subject to non-preferential duties beginning January 1, 2018,” it added.
A review on Sri Lanka's eligibility for the programme was initially carried out after a petition was filed in 2008, outlining shortcomings in Sri Lanka’s recognition of worker rights. Subsequently the benefits for Sri Lanka were suspended in 2010. Then in late October 2011, the GSP bill was approved again allowing Sri Lanka and 129 other nations to receive the benefits of the GSP concessions. In 2015, Colombo claimed that it was granted due to an improvement in the human rights situation on the island. The decision enabled duty free products to enter the US market whilst avoiding the usual 6 to 20 percent general tariff applied to exports. Sri Lanka had one of the highest US GSP utilisation rates among other US GSP beneficiaries.
It is not yet clear whether the concessions would be renewed.