SRI LANKA: EU gives duty-free access to apparels

BRUSSELS: Apparel from a series of Asian countries could be offered a reduction in EU and US tariffs after the tsunami devastated parts of Sri Lanka, Indonesia, India, Thailand and Maldives Islands at the end of last month.

EU could accelerate implementation of its new GSP schemes that will offer relaxed rules of origin to clothing exporters in a large number of developing nations. A bill will also be introduced in the US Congress in early February requesting a duty-free access to the US market for a series of Asian countries, including Sri Lanka and Indonesia.

Although textile and apparel industries were not affected by the tsunami that devastated parts of Sri Lanka, India, Thailand and Indonesia by the end of December, voices are now being heard asking the US and the EU to reduce import duties on clothing from a series of Asian nations. Already weakened by elimination of textile quotas this year, economies of Asian countries would need some boost to overcome impact of the tsunami on various sectors, mainly tourism.

EU's Commission already announced that apparel from Sri Lanka will be granted a duty-free access when the new GSP schemes will be effective. The duty-free treatment will be offered under the new GSP-+ scheme that is reserved for vulnerable countries that signed a large number of conventions related to labour and environmental standards. "Under the new system, Sri Lanka will receive duty-free access to the EU for almost all its GSP exports including on its vital textile and clothing exports," said new EU's trade commissioner Mr Peter Mandelson in a statement.

The effective duty-free access will actually depend on EU's rules of origin. Mr Mandelson confirmed that rules of origin will be relaxed for all new schemes, including the possibility to import fabrics from more countries. Implementation of the new GSP system could be accelerated, he added. The move to the new schemes was initially planned for July 1, 2005. Major UK retailers like Marks and Spencer and Tesco are sourcing a large part of their clothing from Sri Lanka.

More pressure on US Congress after tsunami
In the United States, pressure is growing to offer trade preferences to tsunami-affected countries. As a result, Sri Lanka and Indonesia could be added to a list of Asian countries that could be offered a duty-free access to the United States. A bill known as the Least Developed Economies Economic Development Act (LDEEDA) could be introduced in the US Senate on February 2, said the Bangladeshi Garment Manufacturers Association (BGMEA). The BGMEA hired a US consultancy firm to lobby US Congress in the name of Least Developed Countries (LDCs) in Asia and Oceania, including Bangladesh, Cambodia, Laos, Maldives and Nepal.

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Added: February 12, 2005 Source: Agencies
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