Sri Lanka benefits from GSP+, a special European Union (EU) trading arrangement. The GSP scheme is non-reciprocal, yet the beneficiaries need to implement non-trade-related conventions to be qualified. It gives the EU the leverage to influence the policy variables. The European Parliament passed a resolution on 10 June 2021 starting a case for the withdrawal of the GSP+ preferential access given to Sri Lanka. The loss of preference is a potential outcome of the process stipulated by the resolution. This study will analyse ex-ante, the effect of such a loss of the preference on Sri Lanka’s exports to the EU. In addition, an ex-post assessment will be conducted to estimate the effect of the GSP trade arrangement on exports and global value chain participation using a multi-country dataset.
