The discontinuing of the GSP programme by the US from next year to 120 countries including Sri Lanka would not make a significant impact on the exports to the US, the Government said today.
National Policies and Economic Affairs Deputy Minister Dr. Harsha De Silva said people seemed to be confused with the US GSP and Generalised Scheme of Preferences (GSP) Plus given by the European Union (EU).
“The US GSP applies to 120 countries and there is nothing special or significant to Sri Lanka. Once it was removed, the cost of exports will rise only by about 3% in tariff.
Sri Lanka’s total exports to the US was USD 2.8 billion in 2016. Only USD 173 million exports, which amounted to 6.2% of the total, received the GSP.
The number of textile exports was only 1% which amounted to USD 27 million. Any person can realise that this has no significant impact on our exports to the US,” he told a news briefing.
He said rubber based products, which were exported to the US enjoyed the GSP benefits largely.
“However, USD 173 million worth of exports which received GSP benefit is not a big amount of our total exports of about USD 11,000 million. This will make a negligible impact,” he said.
He said the EU GSP plus was more important than US GSP as only nine countries including Sri Lanka harvest the benefits of the GSP plus when exporting goods to 28 European countries.
“The GSP plus tariff concessions span from 10-20% which is a considerable reduction in tariff. Our exports to the EU stand at USD 3.1 billion in 2016 and over USD 2 billion worth of exports were textiles. We are able to and continue to benefit from the GSP plus. Due to GSP plus, 47% of our fish exports had increased recently. Therefore it is very vital,” Dr. De Silva said.
He said that all 120 countries which received the GSP will have to pay 3% increase in tariff from next year.
“This is not significant as the 10-20% tariff reduction we receive from the GSP plus,” he reiterated.
The deputy minister refused reports which say the concession was not renewed because of the UN vote over Jerusalem, in which President Donald Trump’s decision to recognise Jerusalem as Israel’s capital was defied.
“The GSP has been removed for all 120 countries including the countries which abstained the UN vote and even those who voted alongside the US. The reports are unfounded,” he said.
He also said there was no need to go for State-level discussions with the US over GSP as its a policy based decision of that country.