Next, a British clothing retailer, has stopped sourcing its garments from Sri Lanka because of the uncertainty of the continuance of the g.s.p.+ duty free concession.
“It has moved over to Bangladesh,” an industry source told The Sunday Leader. The g.s.p.+ facility helps Sri Lanka to export garments and several other products to the E.U. on a duty free basis. But the E.U. has threatened to stop this concession by next month if Sri Lanka doesn’t give a written guarantee by July 1 to some 15 conditions governing human rights, the deadline of which is now past.
Garments are Sri Lanka’s largest foreign exchange earner. The duty advantage for garments under the g.s.p. + concession is 9%. Despite the g.s.p. + concession, garment exports to the E.U. in the first four months of the year fell by 13% year on year (U.S.$ 125 million). The industry attributes this decline to the financial crisis facing the E.U region because of the financial debacle in Greece and the Iberian peninsula.
Meanwhile E.U.’s Ambassador in Sri Lanka Bernard Savage told this reporter on Thursday that the E.U. exercises a degree of flexibility in their timeframe given to Sri Lanka to respond to their 15 point programme which may take the form of an acceptance, or, for that matter, any other form. Though the deadline for the Government of Sri Lanka (G.o.S.L.) to reply was on Thursday, the E.U. can still wait for a couple of days for a reply from G.o.S.L., he said.