The EU and the US may withdraw GSP Plus concessions for Sri Lanka. If this happens, it will automatically reduce the country’s export earnings and the competitiveness of its products in EU markets vis-à-vis several Asian countries enjoying such concessions. If the US too withdraws its GSP concessions, it will be a double whammy for Sri Lanka. About 57 per cent of Sri Lanka’s total exports go to these two markets. Apparels are Sri Lanka’s biggest exports to the EU. Almost 90 per cent of Sri Lankan exports to the EU are exported under GSP Plus or with zero duty. The GSP Plus scheme encourages increased value addition within Sri Lanka and thereby promotes backward integration, resulting in the setting up of new industries, and creating new employment opportunities in the country. Sri Lankan exporters can also exploit the potential for agro-based processed food exports in collaboration with European companies through joint ventures and transfer of technology. Small and medium enterprises can be encouraged to work more effectively and be part of the value chains of larger companies. However, the GSP Plus utilization rate is still relatively low in Sri Lanka. It was only 55 per cent in 2017. In clothing, it was 43 per cent.