Apparel exports’ drop due to absence of GSP +
The downturn in apparel exports in the past six months is attributed to the impact of the loss of GSP plus concessions effective since 2010, a European Union Trade and Economics Attaché Roshan Lyman said.
Addressing the Sri Lanka – France Business Council discussion on “EU Trade Policy 2012” this week, he pointed out that being the number one trading partner of 80 countries, 60 per cent of EU imports is from developing countries. In this respect, Sri Lankan businesses have opportunities to participate in the value chain, Mr. Lyman observed.
Speaking with the Business Times on the sidelines of the meeting, he noted that following discussions with some key apparel manufacturing firms in the country, most exporters had indicated that the effect of the GSP + loss is “seen right now.”
He also explained that in the future with most of the other regional counterparts partnering with the EU, Sri Lanka would effectively become one of the only countries without a GSP + agreement with the EU.
Currently, India is in discussion with the EU on establishing a Free Trade Agreement (FTA) and Pakistan is also attempting to qualify for GSP + concessions that might be possible by 2014.
“Sri Lanka is the only country that will not have such an agreement,” he said adding that it was hurting local industries in the wake of the increased cost of production.
Moreover, he noted that regional dynamics was changing “and sometimes other countries qualify more.”
EU is looking at cutting tariffs and reducing subsidies as the latter is considered a distortion on trade, but was keen on offering measures for trade to the less developed countries and the developing countries, Mr. Lyman said.
Commenting on the crisis in Europe, he was confident that Europe was in a “stronger position than what it looks like.”
In this respect, measures were put in place and problems addressed to improve its fiscal position, he said.
He forecast the growth to slow down in the next two years and observed that however, it was expected to look up in five years time.
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