Authorities should strive to regain GSP+: Exporters

Authorities must continue to take steps towards securing GSP+ facilities to Sri Lanka in order to re-energize the country’s export sector, according to outgoing Exporters Association of Sri Lanka (EASL) Chairperson, Dawn Austin.

“The benefits anticipated from GSP+ would have energized the export sector like no other incentive can ever achieve. If there is any possibility, I would urge the authorities to consider this facility as a special case which will, without a shadow of a doubt, result in exponential growth,” Austin stated.

Sri Lanka lost preferential access to European Union market in 2010 following the country’s failure to meet the required human rights conventions that were embedded with the trade facilitation.

The government claimed that the removal of GSP+ facility had no effect on the economy with the apparel manufacturers getting more orders going forward from new markets.

However, the global economic downturn and the flooding of European Union markets with cheap products from China, Bangladesh and Vietnam, the removal of the GSP+ facility was estimated to have cost the country US $ 1.5 billion.

Austin went on to highlight Sri Lanka’s recent eligibility for a new GSP+ facility introduced by the government of Norway.

“The new facility has increased the product coverage and widened concessions and provided an opening for lower middle income countries to diversify their exports and exports of Textiles and Apparel,” she noted.

The new facility, if secured, entitles Sri Lankan exports to enjoy duty free access for all industrial products including all textile items.

About 40 per cent of Sri Lanka’s Rs.2.5 billion exports to Norway were in textile and apparel however the facility also provides preference on selected agricultural products, an area of particular interest for the country.

Meanwhile, discussing the need for further integration with regional trade in the Asian region, Austin noted with dissatisfaction the implementation of nontariff barriers for Sri Lankan exports to India in the recent past.

“While India continues to be Sri Lanka’s largest trading partner, the Exporters Association has already alerted authorities that despite the Free Trade Agreements between Sri Lanka and India being in place, there are inexplicable and insidious Non-Tariff Barriers being implemented to dissuade exporters from tapping into supplying the cast Indian retail market.” Austin stated.

While acknowledging efforts from the Ministry of Commerce to redress such issues, she urged exporters to bring anomalies in dealing with the Indian market to the attention of officials.

“It is imperative to ensure that all aspects are covered with an effectively implemented Mutual Recognition Agreement on standards, testing and certification between the two countries which is outside the terms of reference of CEPA.” Austin asserted.