SRI LANKA: Boost For Apparel Exports

The Lankan economy is in for a big bonanza with indications that the European Economic Commission is to make a five per cent tariff reduction for the country's apparel exports to European Union countries.

This follows a request by Sri Lanka from the EC in Brussels several months ago that the current tariff of 15 per cent imposed on apparel exports to EU countries be brought down to 10 per cent.

The feedback emanating from the EC in this regard points to Sri Lanka being in the way of receiving this concession.

"All indications are that the European Commission will consider our proposals positively," Constitutional Affairs, Enterprise Development, Investment Promotion and Industrial Policy Minister Prof. G. L. Peiris told the Daily News.

Peiris conveyed this view to the Economic Policy Committee meeting chaired by Prime Minister Ranil Wickremesinghe at Temple Tress yesterday.

A five per cent tariff cut is bound to make a considerable difference to the Sri Lankan economy since 53 per cent of foreign exchange comes from apparel exports.

According to Peiris, the concession will cover not only the clothing sector but also leather products and headwear and footwear, benefitting the economy as a whole.

Sri Lanka was the only developing country considered for the concession chiefly due to the country's high degree of compliance with international labour regulations.

Among the chief pledges of the Prime Minister prior to being elected, was to obtain maximum concessions for the apparel industry in the wake of the termination of the Multi-Fibre Agreement in January 2005, resulting in Sri Lanka having to compete with South Asian countries with low labour costs. The favourable response from the EC comes at a time when the local apparel industry has taken a collective decision to increase production and go in for innovation.

Sri Lanka exported 167 million pieces of garments valued at Rs. 67,158 million to the EU in 2002. It is the second biggest market for Lankan garments after the USA.

Source: Daily News

October 30, 2003

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Added: October 30, 2003
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