The Global System of Trade Preferences (GSTP) was initiated by the UNCTAD to develop trading opportunities among the developing countries. Through the framework of the GSTP, its Participants aim to promote economic growth and development by capitalizing on South-South trade.

The origin of the GSTP can be traced back to the ministerial meeting of the Group of 77 in Mexico City in 1976 where the GSTP first found its political expression. The idea was subsequently developed at ministerial meetings of the Group of 77 in Arusha (1979) and in Caracas (1981). In 1982, the Ministers of Foreign Affairs of the Group of 77 in New York defined the basic components of the Agreement and established a framework for negotiations. The Group of 77 began preparatory work in Geneva in 1984 with Ministerial impetus provided in 1985 through the New Delhi ministerial meeting. The Ministerial meeting in Brasilia in 1986 established the GSTP as a provisional legal framework and launched the first round of negotiations on preferential trade concessions. In 1988, in Belgrade, participants completed the negotiations on the text of the Agreement, as well as the first round of tariff reduction negotiations.

GSTP - at a glance

Date of signing of the agreement Date of coming into effect Members Negotiation approach Products coverage
13th April 1988 19th April 1989 **42 Developing nations Positive List 651

*The 42 GSTP members are; Algeria, Argentina, Bangladesh, Benin, Bolivia, Brazil, Cameroon, Chile, Cuba, the Democratic People’s Republic of Korea, Ecuador, Egypt, Ghana, Guinea, Guyana, India, Indonesia, the Islamic Republic of Iran, Iraq, Libya, Malaysia, Mexico, Morocco, Mozambique, Myanmar, Nicaragua, Nigeria, Pakistan, Peru, Philippines, Republic of Korea, Singapore, Sri Lanka, Sudan, Thailand, Trinidad and Tobago, Tunisia, the United Republic of Tanzania, Venezuela, Viet Nam, Zimbabwe, and Mercosur (South American trade bloc incl. Argentina, Brazil, Paraguay and Uruguay).

 

Rules of Origin Criteria (RoO) under GSTP applicable to Sri Lanka – at a glance

 

Wholly obtained products

Not Wholly obtained products

General Rule

Cumulative Rule

50% < DVA

60% < RAC

 

 

 

DVA = Domestic Value Addition
RAC = Regional Aggregate Content
 

Statistical Analysis

Sri Lanka’s country wise exports under GSTP                                        

 Value in US$ Mn

Country  

2016

2017

2018

2019

2020

Change in 2020
over
2019 (%)

Share in 2020
(%)

Mexico

20.86

45.37

56.23

40.01

37.66

(5.89)

42.05

Peru

12.14

16.24

20.43

12.29

26.34

114.29

29.42

Bolivia

3.68

4.86

3.38

7.71

8.44

75.55

9.42

Iraq

 -

0.12

0.01

4.84

5.85

51.19

6.53

Guinea

0.73

4.81

4.98

(35.40)

5.56

Ecuador

1.58

5.59

4.38

3.87

2.47

2.79

2.76

Chile

2.36

3.04

3.62

2.4

1.06

76.51

1.18

South Korea

0.51

0.23

0.15

1.45

0.85

(41.58)

0.95

Other

4.02

5.02

4.45

3.33

1.90

(74.85)

2.13

Total

45.14

81.2

92.65

80.71

89.54

10.94

100

 Source: Sri Lanka Customs

                                        

 Sri Lanka’s imports under GSTP (Total)
                                                

Value in US$ Mn

2016

2017

2018

2019

2020

0.03

0.06

0.03

-

0.17

 Source: Sri Lanka Customs

                            
Sri Lanka’s product wise exports under GSTP

                                    

Value in US$ Mn

HS

Description

2016

2017

2018

2019

2020

Change in 2020 over
2019 (%)

Share in 2020 (%)

090611

Cinnamon; Neither crushed nor ground

41.12

74.58

88.28

65.95

 77.32

17.25

86.35

761290

Aluminum casks, drums

-

0.74

-

9.58

8.45 

(11.83)

9.44

080111

Coconuts Desicated : Other 

0.12

0.17

0.75

1.33

0.82 

11.76

0.92

Other

3.91

5.72

3.62

3.85

295 

(33.60)

3.30

Total

45.14

81.20

92.65

80.71

89.54 

10.94

100.00

Source: Sri Lanka Customs