No cause for alarm; Brexit could take longer
Subhashini Abeysinghe
Negotiations for Britain’s exit from the EU could take longer than stipulated (two years) and there is no reason for immediate panic (from Sri Lanka and the rest of the world), a meeting was told on Tuesday. It was also disclosed at the Sunday Times Business Club (STBC)’s monthly meeting that there is a small chance that the decision may be reversed (meaning Britain’s decision to exit). The STBC meeting discussed various issues and implications for Sri Lanka from ‘Britain’s exit from the EU:
The discussion involved eminent panellists – namely Paul Godfrey, Chargé d’affaires, Delegation of the European Union to Sri Lanka and the Maldives; Ms. Subhashini Abeysinghe, Head of Economics, Verite Research; and Srilal Miththapala, Past President, Tourist Hotels Association of Sri Lanka. It was pointed out that it took Greenland, a small country with 55,000 people three years of negotiations to leave the EU. Greenland is an autonomous territory within the Kingdom of Denmark.
Srilal Miththapala
Brexit has complex negotiations
Negotiations will take time as Britain’s exit is even more complicated (than Greenland), it was said. Sri Lanka applied for GSP + on June 19 and the process would take 8-10 months thereafter when a decision is reached on the application. Panellists said it is a little too premature to panic over Brexit. Maybe UK could be the entry point to the EU for trade like what Sri Lanka wants to be to South Asia, it was suggested. Ms. Abeysinghe, in her presentation, said exports to UK have been stagnating since 2007, noting that while this continues to be the second largest export destination its share has declined.
Growth in exports to UK has been lower than growth in exports to other destinations during 2010-2015, she said adding that for Sri Lanka, apparel is the largest beneficiary of GSP +. “UK is the single largest export destination for Sri Lankan Apparel in the EU.” Ms. Abeysinghe noted that 79 per cent of exports to UK is apparel compared to 54 per cent in the rest of the EU. After 2009, growth in apparel to UK fared poorly in comparison to exports to rest of the EU. It’s an uphill battle for the UK, she said adding that Britain must negotiate more than 50 trade deals, to replace the ones Britain will forfeit by leaving the EU.
Paul Godfrey
Under the maximal form of withdrawal, civil servants would painstakingly have to copy, or scrap, EU regulations, she said adding that, according to one estimate, only about 20 civil servants in London now have experience in complex trade negotiations. Mr. Miththapala said that with the weakening of the UK currency, changes to aviation regulatory framework, and other post-BREXIT woes, and whatever long term effects will unfold in the UK, there is no doubt that outbound UK travel to Sri Lanka will take a hit in the short term,
Since Britain is an important source market for Sri Lanka tourism, it would be prudent for Sri Lanka Tourism to be mindful of the behaviour of the British tourist market in the short term, as UK settles down in the post Brexit era. “Sri Lanka may have to resort to time based tactical promotional offers, and other creative initiatives to keep the British interest in Sri Lanka as a tourist destination, alive.” He added that local tourism promotion should not resort to discounting but add value to the holiday package. “Slow down on marketing, and increase sales activities,” was his view.