Apparel industry wants liberalised shipping, freight
Sri Lanka’s apparel industry praised government moves to liberalise the shipping sector insisting that competition should be the order of the day.
Sri Lanka Apparel Exporters Association (SLAEA) President Felix Fernando addressing the association’s AGM held at the JAIC Hilton on Tuesday said that the lifting of restrictions on the foreign ownership on the shipping and freight forwarding agencies enabling major international shipping lines and logistic operators to base their operations here in Sri Lanka would ensure “healthy competition.”
Finance and Mass Media Minister Mangala Samaraweera who was also the chief guest at the event was commended for his firm stand on this proposal.
He explained that in view of the amendments set to be made to the Sri Lanka Ports Authority (SLPA) and the Merchant Shipping Act that would ensure these pieces of legislation would be in line with the demands of the modern day logistics and marine industry, which is also of relevance to the apparel industry.
Moreover, the industry is currently looking at ways to maximise benefits from GSP + by engaging in cross regional cumulation for fabric with selected ASEAN countries like Indonesia, Thailand and Malaysia, Mr. Fernando said.
He added that the European Commission would consider if such joint requests were submitted by the countries involved in the two regions for granting the facility.
Meanwhile, the apparel industry is currently reaping the benefits of the GSP + as figures have indicated a visible growth up to September 2017, an increase of 11.58 per cent in exports compared to 2016. This is set to surpass the US$5 billion earnings for the first time (in coming years). Targets are set to achieve $8 billion in 2022 and making Sri Lanka the sourcing hub of apparel.
He also insisted that Sri Lanka needs to tap other EU countries like Germany apart from the UK which in the wake of Brexit moves could change their trade relations with Britain outside of the bloc.
Commenting further on the liberalisation drive under the current government, Mr. Fernando said fast tracking this is expected to be introduced to regain the momentum of liberalisation introduced in 1977 with the revision of laws.
In this context he noted that the introduction of a new Customs Law, Excise Duty Law and Labour law will impact positively on the economy.
He also believed that if the option of a five day week with flexible working hours proposed under the Shop and Office Employees Act is extended to the Wages Board Ordinance it would help the apparel industry in reducing unnecessary overheads and will be most welcome by the majority of employees.
Moreover, Mr. Fernando pointed out the concerns regarding attracting sufficient females to enter the profession as their image had been tarnished in derogatory terms.
German Ambassador Joern Rohde said that Sri Lanka needs to use these few years to regain market share and get new contracts in the German market.
Sri Lanka needs to tap German importers and the fashion design industry to increase their presence as currently only about 10 per cent of EU exports go to Germany.
The ambassador noted that in terms of the general economic development in Sri Lanka it should not miss the bus again on diversified export portfolio and ensure increase women participation in the workforce.
Mr. Rohde noted that while everyone is for the opening up of the economy, however, when “it is yours then there is concern like the shipping industry”.
He pointed out that they would open up a German Chamber office in Colombo next year to create business-to-business contacts.
Finance Minister Samaraweera addressing the gathering said that the apparel industry was an exemplary sector that clearly showed how the industry could survive and ride against the competition.
He identified the reason for the success of the industry was due to the fact that they were able to get the people out of poverty by creating job opportunities.
The minister said the government would support the industry in facing the challenges of the international market and in achieving the $8 billion commendable target.
The government has reduced the items subject to para tariffs and pointed out that about 1, 200 items had been removed on Monday night by gazette.
Minister Samaraweera also noted that a world class logistics network was necessary to connect with global supply chains and added that the liberalisation of the shipping and freight industry would help to attract global interest in Sri Lanka.
He also commended the apparel industry for their work involved in the reconciliation process by setting up businesses in the north of the country thereby creating job opportunities for the youth there.