Sri Lanka is aiming for a special bilateral preferential trade agreement with the United Kingdom. The UK has already assured Sri Lanka that GSP Plus concessions will continue in the Brexit transitional period, which is expected to last for approximately 21 months following Brexit.

Sri Lanka can potentially explore a free trade arrangement with the UK without any strings attached and gain the same or more benefits of the GSP Plus scheme as opposed to the EU’s Plus scheme where Sri Lanka has to fulfil several conditions. Such an agreement can also enable Sri Lankan export commodities to be more competitive in the UK, as the EU has granted the Most-Favored Nation status to countries such as China and Maldives, which are competing with Sri Lanka in the EU market.

However, Sri Lanka’s utilisation of the GSP Plus scheme remains weak compared to other countries. Sri Lanka has utilised 55 per cent tariff lines in the GSP Plus scheme while Pakistan and Philippines have utilised 96 per cent and 73 per cent of the tariff lines. So Sri Lanka needs to diversify its export basket in order to gain the full benefits of the scheme. The UK plans to focus more on Commonwealth countries including Sri Lanka, an area which has somewhat been neglected for several decades.