Sri Lanka's terror law could cost it a trade lifeline

A security Bill meant to please Brussels may end up angering it

Sri Lanka has spent four decades trying to rid itself of the Prevention of Terrorism Act (PTA), a law used so freely that even its authors, in the 1979 parliament, called it temporary. The Protection of the State from Terrorism Bill (PSTA), gazetted and tabled this week, is meant to replace it. Critics say it keeps much of the old machinery. That matters beyond the human-rights lobby, because the EU's GSP+ trade concession depends on it.

The price of access

GSP+ is not a gift. It gives Sri Lankan goods duty-free entry to the EU in exchange for compliance with 27 international conventions on human rights, labour and the environment, a list that grows to 32 in 2027-28. The UN and the EU have said for years that any PTA replacement must meet those standards: narrow definitions, protection for association, assembly and expression, and courts that can check the Executive.

A cushion under a weak sector

Apparel is the country's biggest export, worth about US$5bn a year and over 40% of merchandise exports. Fabric and textiles add roughly US$522m. The EU takes a little over 30% of the total; in the first half of the year Sri Lanka exported $705 million of apparel to the EU.

The sector can ill afford a shock. In the first half of 2026, Sri Lanka’s apparel exports to the EU fell 8% compared to 2025. By contrast the EU’s import of apparel from China grew 5% whilst Vietnam grew 9%. The writing is on the wall; Sri Lanka is losing valuable market share to Europe whilst other countries grow. Europe is a market Sri Lanka can least afford to weaken.

What is wrong with the Bill

Legal experts who have followed four attempts at PTA reform since 2018 say the text improves on earlier drafts but still falls short. Their main complaints:

• Elastic definitions. "Terrorism" covers damaging public property and some forms of publishing, matters ordinary law already handles.
• Proscription. The President could ban any organisation on "reasonable grounds", with no threshold and no court involved. The PTA contains no such power.
• Movement orders. These could run for 72 hours before a judge sees them.
• Detention. Orders last two months and can be renewed for up to a year. Magistrates are largely expected to sign off on police requests.
• Soldiers as police. The armed forces and coast guard would gain powers to stop, search, arrest and hold people for 48 hours. Unlike emergency rule, which Parliament must renew monthly, these powers would be permanent.

Where are the judges?

The common thread is the absence of judicial oversight. Nobody doubts that a state needs security powers. The question is who checks them. Ordinary law keeps a magistrate in the loop, and stakeholders have asked why this Bill does not.

The fixes are modest. Let magistrates weigh evidence before approving detention, give courts a role in proscription, and leave arrests to the police.

The Bill had its first reading on 6 October. Under the Constitution, petitions to the Supreme Court can be filed within 14 days of a Bill reaching Parliament's order paper, and the Court then has three weeks to rule. A debate is therefore unlikely before November. Campaigners say the government wants the Bill passed before the Budget, which is presented on 12 November. The Court can rule on constitutionality but not on policy, so committee-stage amendments are the realistic route to change. The government accepted several suggestions on last November's draft, which suggests it can still be moved.

The industry's case

JAAF does not argue that Sri Lanka should have no counter-terrorism law. Its case is simpler: a law this broad, with so little judicial oversight, puts at risk the trade access that supports hundreds of thousands of livelihoods. The current cycle of the GSP+ ends in 2027, and Sri Lanka, like any other beneficiary country needs to reapply for the new cycle of the scheme. The PSTA, in its current format, is very likely to be a roadblock in country’s application for the new cycle. The EU is a bureaucracy, and if Sri Lanka’s application for the new round of GSP+ is unsuccessful because of the PSTA, this will leave the country without its largest trade preference programme. Fixing the Bill now is cheap. Fixing it afterwards will not be.