1 The Generalised System of Preferences (GSP) is a non-contractual instrument by which industrially developed countries extend tariff concession to goods originating in developing countries.

GSP+ stands for Generalised Scheme of Preferences Plus. The scheme allows eligible developing countries to pay no duties on some exports to the European Union. It is part of the EU’s wider GSP regulation with the Standard GSP and Everything But Arms (EBA), but offers additional trade incentives.

U.S. trade preference programs such as the Generalized System of Preferences (GSP) provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty. GSP is the largest and oldest U.S. trade preference program.

The U.S. GSP program promotes economic growth in the developing world by providing duty-free entry to the U.S. market for goods imported from designated beneficiary developing countries. Approximately 3,451 different products from Sri Lanka are eligible to enter the United States duty-free under the GSP program.

Sri Lanka is a beneficiary country under the EU’s Generalised System of Preferences (GSP) scheme since 1971.

The tariff policy of the government aims at providing a transparent and predictable frame work for all stake holders in the foreign trade sector. Based on product categories, Sri Lanka maintains a four band tariff structure at present: Basic Raw materials and Machinery 0% Intermediate Products 15%

Services accounted for 58.2% of Sri Lanka’s economy in 2019 up from 54.6% in 2010, industry 27.4% up from 26.4% a decade earlier and agriculture 7.4%. Though there is a competitive export agricultural sector, technological advances have been slow to enter the protected domestic sector.

Our country is not self-sufficient and international trade helps our county to import the resources or goods needed. Also helps to export the products to other country which is bringing foreign currency to the country. International trade has contributed immensely development of our nation.

Trade policies, in general, define the standards, goals, and rules and regulations of trade agreements between countries. These policies can also reflect embargoes and other trade barriers that are in place. Bilateral trade policies are formed between 2 nations to regulate business and trade relations between them.

The trade barriers are imposed by the government by placing rules and regulations, tariffs, import quotas and embargos. The four different types of trade barriers are Tariffs, Non-Tariffs, Import Quotas and Voluntary Export Restraints.

The three major barriers to international trade are natural barriers, such as distance and language; tariff barriers, or taxes on imported goods; and nontariff barriers. The nontariff barriers to trade include import quotas, embargoes, buy-national regulations, and exchange controls.

The basic line of government control of international trade is the application of two different types of foreign trade policy in combination: liberalization (free trade policy) and protectionism.

A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

BOP=Current Account+Financial Account+ Capital Account+Balancing Item. The current account records the flow of income from one country to another. The financial account records the flow of assets from one country to another.

It also reveals whether the country produces enough economic output to pay for its growth. The BOP is reported for a quarter or a year. A balance of payments deficit means the country imports more goods, services, and capital than they export. A surplus boosts economic growth in the short term.

Difference between the Balance of Trade and Balance of Payment. BOT is a statement which records a country’s imports and exports of goods with other countries in a period. Whereas BOP records all the economic transactions performed by that country within a period.