US trade concessions sidelined by Human rights concerns

Human rights concerns are spilling over into the area of trade, diverting attention from potential trade benefits to the country.
This week, the US ambassador said that concerns about Sri Lanka’s human rights situation have ‘eclipsed’ US attention on providing trade benefits to the country - despite Sri Lanka’s investment in ethical manufacturing. Sri Lanka’s garment industry is lobbying for trade concessions from the US to retain US market share. Earlier this year the Joint Apparel Association Forum, the industry representative body, visited the US to drum up support for trade concessions, mainly based on ethical manufacturing practices. The industry promoted its ethical manufacturing standards through its ‘Garments without Guilt’ campaign. However, Sri Lanka’s human rights image is now encroaching on the area of trade, turning US policy makers’ attention away from trade benefits, to human rights.

“JAAF had a successful visit to Washington , DC earlier this year. I have heard from various sources that the JAAF team impressed several members of our U.S. Congress, among others,” said US ambassador for Sri Lanka and the Maldives, Robert Blake, speaking at the Sri Lanka Apparel Exporters Association Annual General Meeting on Tuesday. “Unfortunately concern in the United States about the human rights situation in Sri Lanka has eclipsed the attention afforded to the “Garments without Guilt” campaign,” said Blake.

To save the situation, the industry was told to help improve the human rights record.

“Given your industry’s influence and the stake you have in continued strong relations between the United States and Sri Lanka , I encourage the Apparel Exporters Association and its members to help find a positive resolution to these human rights concerns,” said Blake.

The US is Sri Lanka’s single biggest trading partner accounting for 29% of total exports in 2006. The US is also Sri Lanka’s largest export destination for ready made garments accounting for around half of total exports.

However, Sri Lankan garments are facing growing price competition in the US. The situation is expected to worsen when restraints on Chinese exports into the US are removed by end of next year.

To retain market share and sustain the domestic industry that supports nearly 300,000 people through direct employment, the garment industry is asking the US for duty free access for Sri Lankan garments.

The industry wants Sri Lanka to be included among a list of 14 least developed countries that would get trade benefits under a proposed new US law called the New Partnership Bill for Development 2007. The proposed law is already before the Ways and Means Committee of the US House of Representatives but the industry says there is still time to include Sri Lanka in the list of selected countries.

To do this, the industry called on the support of the US ambassador, despite the negative human rights image.

“It is true that Sri Lanka is beset by many acute problems, but nevertheless its business community, particularly the apparel industry, has proved to be ethical and competitive even at the highest international level. Hence we trust Your Excellency shall take the necessary steps to assist Sri Lanka in this hour of need,” said Chairman of the Sri Lanka Apparel Exporters Association, Noel Priyatilake.

Sri Lanka already gets trade concessions from the EU, under the GSP+ trade scheme on grounds of being a vulnerable economy and on the basis of high labour, environmental and governance standards. The scheme, that allows duty free garment exports, helped increase garment exports into the EU by 23.8% this year from January to September, compared to the same period 2006, despite increased competition in European markets.

Exports to the US however are volatile, with some months going negative and showed only a marginal 0.36% cumulative growth from January to September this year compared to the same period in 2006.