Apparel industry hails $ 150 m bail out package

by Gamini WARUSHAMANA

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The apparel industry welcomes the government's $150 million bail out package to cushion the impact on Sri Lanka's export industries if the European Union (EU) terminates the GSP+.

The Joint Apparel Association Forum (JAAF), the umbrella organisation of the industries said that this would take a lot of pressure out of industrialists, employees and many other industries and services connected with the apparel industry.

JAAF Deputy Secretary General Rohan Masakorala said that this package will build confidence in buyers, industrialists and the domestic financial sector. At least now we know that next year we can go ahead in the business and face competition in the EU market, he said.

He said that the GSP+ is not a concession and only a removal of the protectionist duty which allows a level playing field. This helped us to compete with products from countries such as Bangladesh and Vietnam at zero duty as well as low cost Chinese products. There is a huge price difference between these products and ours and the GSP+ made a level playing field to us, Masakorala said.

Masakorala said that it is difficult to face competition without this kind of relief. The GSP+ was given for a 10-year period subject to renewal after three years. Around 65% of Sri Lankans exports under the GSP+ are apparel and even small farmers in rural areas benefit, as fruits and vegetables exports also go to the EU market under GSP+.

Masakorala said that the EU with a 500 million population is the largest market for our apparel products and it is vital for the industry.

The growth in the EU market is mainly due to the GSP+ and it is difficult to compete in price in today's position of the industry. He said that the apparel exports to the US market have declined by 10% this year.