JAAF takes up GSP+ issues with visiting EU delegation

• Says industry could have achieved additional 3% to 4% if the concession had not been withdrawn

At a meeting held last week between the visiting EU delegation and the representatives of the Joint Apparel Association (JAAF), the importance and value attached to the EU market to the apparel industry was highlighted and mentioned that in 2014, the apparel industry had exported $ 2.1 billion worth or 46% of its total exports mainly to the EU.
It was disclosed that Sri Lanka’s share of the international apparel market still remains at around 2% of the total international market, which clearly demonstrates the enormous potential for the apparel industry to expand its share in the world market, the JAAF delegation had further explained.
These were explained during a luncheon meeting with the six-member EU delegation led by Head of Mission Marc Vanheukelen, Director – DG Trade of the European Commission together with David Daly – Ambassador and Head of Delegation with the JAAF. Chairman Azeem Ismail, Secretary General M.P.T. Cooray, Chairmen of its member associations and industry leaders participated at this meeting.
The discussion was centred on the restoration of the GSP+ tariff concessions to Sri Lanka which is a primary agenda item of the 100-day program of the new Government.
The GSP+ tariff concessions enjoyed by the industry from 2005 to 2010 helped the industry to move in the right direction and exports had increased from $ 1 bin 2005 to $ 1.7 bin 2010; after the withdrawal of GSP+ in August 2010, the industry was able to sustain its exports to the EU and achieved a moderate annual growth rate of 6% to 7% during the period 2010 to 2014.
However, the industry could have maintained an annual growth rate of over 10% and added an additional $ 600 mto $ 700 m to its export turnover if the GSP+ had been available, the apparel stakeholders had pointed out.
Another issue that was mentioned during the meeting was the absence of a level playing field in the international market place for Sri Lanka Apparel; while Least Developed Countries (LDC) have duty free market access, many of Sri Lanka’s competitor countries either enjoy preferential access or are on the verge of concluding Free Trade Agreements. This situation has put Sri Lanka at an enormous disadvantageous position and poses new challenges.
Ismailstated that the industry was therefore very eager that the restoration of GSP+ to Sri Lanka takes place as early as possible and hopefully by the end of this year.
The industry representatives added that they were extremely pleased that the new Government with which they work very closely has already commenced a constructive dialogue with the EU and already appointed a committee to undertake preparatory work for submission of their application.
The apparel industry indicated that the visit of the EU delegation to Sri Lanka to hold the official level meeting of the subcommittee on trade, under the Sri Lanka-EU joint commission was a positive and a clear indication that there was serious engagement from both sides and both sides were refocusing and giving careful attention to address economic and trade issues to benefit business communities of both sides.
Cooray mentioned that the JAAF played a very active role working with the Government to obtain GSP+ in 2005 and lobbied very hard with the Government to retain this valuable concession when EU commenced an investigation on Sri Lanka.
He added that it would continue to work with the Government very closelyand re-emphasisedthat the EU market and the GSP+ facility were extremely important to the apparel industry to sustain and also to expand with new investments, in particularin the lagging regions of the country to provide employment opportunities for unemployed people in those areas and economic growth of the country. The EU Head of Delegation stated that the very fact that they were in Sri Lanka displayed the desire of the EU in assisting the Government and the people of Sri Lanka in order to achieve development goals through unilateral extension of concession of GSP+.
He reiterated that the submission of application for GSP+ should be made with credible reporting on the relevant 27 conventions, in particular, on human rights and the confidence has to be built with implementing measures to reflect actual commitment to correct the deficiencies, if any.
The industry had also elaborated that while GSP+ tariff concession would assist it in the short term, its long-term was to elevate the trade relations to that of a Free Trade Arrangement as it would provide stable long-term market access with predictability. During the discussion, JAAF emphasised the importance of the timefame attached for the restoration of GSP+ and requested exploring the possibility of hastening the process for which the industry would work consciously with the Government and provide necessary support through the industry relationship in the EU countries.