Sri Lanka can do more to utilise GSP Plus to fullest: ITC

• SL urged to look beyond apparel exports
• Says health crisis presents new opportunities 
• Points out Central and Eastern Europe offer new potential 
• Urges to engage in active dialog with EU over stringent rules 

By Shabiya Ali Ahlam
Although Sri Lanka continues to explore avenues to expand its export market and basket, according to the International Trade Centre (ITC), the island nation has not capitalised enough on the available GSP Plus scheme to increase its foreign exchange earnings.

ITC Consultant Lawyer Colette van der Ven via a webinar held recently pointed out that Sri Lanka could do much more with the preference scheme, if the country broadens its focus and looks beyond the apparel sector.

Pointing out that the notion that GSP Plus is only made available for the export-dominant industry is a misconception, van der Ven said the global health crisis has brought about fresh opportunities, which Sri Lanka can tap into, especially given the recent contraction in apparel exports.

“There is an importance of product and market diversification and it requires a proactive way of exploring the potential there,” she said while addressing a webinar themed ‘GSP Plus for Enhanced Market Access’.

Under production diversification, Sri Lanka must utilise trade preferences beyond the dominant export products such as apparel, whereas in terms of product diversification, the nation must look at exploring export destinations beyond the regular markets, she added.

While Central and Eastern Europe are areas of key potential for the island nation, she noted that the pandemic has stressed the need to utilise the maximum trade preference.  

In the context of COVID-19, van der Ven said there is immense opportunity in manufacturing and exporting COVID test kits, PPEs, thermometers, disinfectants, medical consumables and other medical devices.

Although face mask imports from Sri Lanka increased by 687 percent for the January to June 2020 period, from a year ago, it represented only 6 percent of the total value of textiles, apparel and footwear exported.

Meanwhile, one of the key challenges faced by Sri Lanka in maximising the use of the GSP Plus scheme is the low conformity to the stringent Rules of Origin of the EU region. 

The country was urged to engage in active dialog with the EU to improve awareness in complying with the set of rules.

Furthermore, van der Ven asserted that Sri Lanka must take advantage of the new opportunities, such as e-commerce, digital services and PPEs, so that it doesn’t fall behind.