Top garment exporter says Brexit could level playing field

Britain’s exit from the European Union generates opportunities as well as risks with a potential benefit being that it could level the playing field for apparel exporters, as all countries would lose duty free access, a top garment exporter said.

Noel Priyatilleke, Deputy Chairman of Sri Lanka Apparel, said Britain remains an important market for apparel exporters, with about 18% of Sri Lankan garments exports going there. “That’s a very significant number,” Priyatilleke said, speaking at a seminar on ‘Brexit the new order: the business impact’ organised by the Shippers’ Academy Colombo and supported by The Council for Business with Britain. “The UK remains an important market for us.”Duty free access to the EU markets was important for apparel exporters with exports growing about 10% annually during 2005-10 when the GSP Plus concession was available and falling to a growth rate of 5% after the GSP Plus was lost, said Priyatilleke, a former chairman of the Sri Lanka Shippers’ Council. “We estimate we lost about half a billion dollars a year without GSP Plus.”

Britain’s exit from the EU presents opportunities too, he said, giving the example of Bangladesh, one of Sri Lanka’s main competitors in the apparel trade.

“If Britain exits from the EU, no one gets duty free access. It will level the playing field.”

He also said the impact of import duty rates in Britain was still not clear. The EU import duty rate was 12%.

“The UK can choose to either raise or lower its import duty rate.”

Meanwhile, the CEO of the Shippers’ Academy Colombo, Rohan Masakorala told the Business Observer, “Apparel is one of the major exports to the UK. In the medium term, if Sri Lanka gets GSP+ early next year, we may have a disadvantage as more than 40% of our apparel and other exports go to the UK market in EU.

If we as a country cannot develop a bi-lateral arrangement with the UK, it will affect apparel and the rest of the exports in some way in the future.”