Sri Lanka is set to benefit from the UK’s new trade concessionary scheme Developing Countries Trading Scheme (DCTS) that will replace the GSP+ in that country and will be in force from 2023, finance ministry sources said.
The UK’s new Developing Countries Trading Scheme (DCTS) is one of the most generous sets of trading preferences of any country in the world, and will benefit Sri Lanka by boosting the economy and supporting jobs,as senior official of the ministry said.
Under the new scheme, Sri Lanka will continue to benefit from duty free exports to the UK on over 80 percent of export products while tariffs on over 150 additional products will also be removed.
According to the latest UK fact sheet on bilateral trade, total trade in goods and services (exports plus imports) between the UK and Sri Lanka was £1.3 billion, in current prices.
This was an increase in the four quarters to the end of Q3 2022, an increase of 10.2 percent or £124 million from the four quarters to the end of Q3 2021.
Of this £1.3 billion: total UK exports to Sri Lanka amounted to £336 million, in current prices, in the four quarters to the end of Q3 2022 (an increase of 10.2 percent or £31 million compared to the fourquarters to the end of Q3 2021).
Total UK imports from Sri Lanka amounted to £1.0 billion, in current prices, in the four quarters to the end of Q3 2022 (an increase of 10.2 percent or £93 million compared to the four quarters to the end of Q3 2021).
Sri Lanka was the UK’s 80th largest trading partner in the four quarters to the end of Q32022 accounting for 0.1 percent of total UK trade.
In 2021, the outward stock of foreign direct investment (FDI) from the UK in Sri Lanka was£309 million.
In 2021, the inward stock of foreign direct investment (FDI) in the UK from Sri Lanka was £11 million.
Sri Lanka’s access to the Generalized Scheme of Preferences (GSP) Plus was already under review for extension as the country failed to adhere to several of the commitments it made, mainly with regard to human rights.
GSP is an annual trade concession worth over US$ 500 million which has boosted Sri Lanka’s exports to EU member states mainly in the garments sector, a top forex earner.
The EU has stressed on several occasions that the island nation needs to uphold its commitments, particularly with regard to eradicating human rights violations in the country.
Recently Sri Lanka has fallen into trouble as it failed to implement several of the commitments undertaken including repealing the Prevention of Terrorism Act (PTA).