Dip in Sri Lankan apparel exports raise concerns

30 Jul '12

2 min read

Concerns are being raised over fall in Sri Lanka’s apparel exports, particularly to the European Union (EU).

Harsha de Silva, a legislator representing Sri Lanka’s main opposition, said withdrawal of tariff preferences by the EU due to poor governance of Sri Lanka is expected to lead to a further fall in country’s apparel exports to the EU.

During May this year, Sri Lanka’s apparel exports dipped by 13.5 percent to US$ 278.2 million, while first four months exports fell by 4.9 percent to US$ 1.6 billion.

Mr. Silva, who is also a development economist with a PhD from the University of Missouri, said grappling against economic woes in the region, the country is now feeling the heat of withdrawal of the Generalized System of Preferences plus (GSP+) by the EU.

GSP+ status is granted to the countries allowing broader rights and freedoms to their citizens as per the International Covenant on Civil and Political Rights.

The legislator said the country’s monthly apparel exports that stood at US$ 367 million in January this year, dipped to US$ 278 million by May, 2012.

He said the overflow of orders from China during early last year led to an overbooked situation, which eclipsed the effects of withdrawal of the GSP+ facility. However, the conditions are no more the same, and the impact is much more intense even than the demand slump in the EU, he added.

The real impact of loss of the GSP+ is now becoming apparent, as the country is losing out on apparel export orders to the countries that are still enjoying the duty concessions with their good governance, and hence have a better competitive edge.

As such, it would be wise to give a second-thought and make efforts to regain the GSP+ facility, he added.

Fibre2fashion News Desk - India