Exporters count on Govt to secure GSP concessions

14 May '08

2 min read

Both the ruling and opposition party of the present Sri Lankan Government are striving hard to save the vital apparel industry of the country which is by far the largest foreign exchange earner for the nation.

It has become quite evident that the garment industry is on the edge of losing its market in Europe if the concession of Generalized System of Preferences (GSP+) is withdrawn due to deteriorating human rights record.

Already Sri Lanka is facing a tough time dealing with unwavering competition from neighboring countries like India, Bangladesh and China. Absence of GSP+ concession would make matters worse leaving the apparel industry of the country virtually paralyzed, since nearly 45.2 percent of the sector's revenue comes from European Union countries.

Contemplating the outcomes of GSP+ withdrawal, Mr Noel Priyatillake, Chairman of Sri Lanka Apparel Exporters Association told Fibre2fashion, “With regard to Sri Lankan apparel exports, in 2007 a growth of 27 percent was registered for exports to the EU, whereas there was a negative growth of -3 percent to the US, resulting in an aggregate growth of 7 percent.

Export value to the EU was US $1.5 billion, 60 percent out of which was due to the GSP concessions. So naturally, if concessions are drawn off, there will be a drop in exports. However, the government of Sri Lanka is working towards achieving a favorable result.”

When asked if any measures could be taken to escape such miserable consequences, Mr Noel asserted that the GSP concession was granted to Sri Lanka in 2005, subject to the ratification of 27 conventions.

In 2006 the Supreme Court of Sri Lanka gave a verdict that in order to give effect to these conventions; the Sri Lankan Parliament has to pass specific laws. These laws were passed in 2007. In 2008, the Supreme Court confirmed that these were now compliant. We are therefore hopeful that in October 2008, when applications are made, there will be a positive reply.

Fibre2fashion News Desk - India