Catching a break

Tuesday, 21 June 2016 00:01 - - {{hitsCtrl.values.hits}}

Regaining the GSP+ facility was hailed by Prime Minister Ranil Wickremesinghe last week but now the hard work of getting back Sri Lanka’s market share in the European Union (EU) must begin.

Fish exports associations have already flagged the breakdown in relations with suppliers that they have spent years building and the need to get these supply chains re-linked after the hiatus of many months will take more time. While the Government may pat itself on the back for getting preferential access back to the industry, it nonetheless has to assist local companies to get its systems back online. Some companies have voiced fears that it could take three to four years to bring revenue back to pre-ban days.

No person, or in this case country, is an island. Sri Lanka, especially being an island, is intrinsically linked to the rest of the world and engaging proactively with it can have beneficial results for everyone. This was proved when the Government won a fresh feather for its cap when the EU announced it proposed to lift the ban on local fish exports.

With the country starved for foreign exchange and desperate for investment, the removal comes at a crucial moment for Sri Lanka. After nearly a year of ceaseless engagement with Europe, it was a moment of true triumph. The Government, often accused of being fractured and sporadic in its policies, managed to steer the dialogue effectively and got key stakeholders including EU members on board to lobby for its removal.

While companies are busy brushing up their export products, the Government is taking forward its next battle – GSP+. Already preparing the official application for the reinstatement of the preferential tax system, the Government can move on to the next stage on a high from the fishing reprieve. The Government has already begun preliminary discussions and is confident it can get the facility passed by the EU parliament by the end of this year.

Sri Lanka was previously the second biggest exporter of fresh and chilled swordfish and tuna to the EU with exports worth EUR 74 million in 2013. According to the Fisheries Ministry, Sri Lanka’s total fish exports dropped by 34% last year compared to 2014, while the value dropped by 29%.

The country’s fish exports to the EU make up 68% of its total fish exports, which brings in $ 160 million annually. Sri Lanka is one of the biggest exporters to the EU of high value fishery products such as fresh and chilled swordfish, tuna and tuna-like species. The remaining 32% is sent to the US, Japan and other non-EU countries.

Dozens of companies are now readying to take back their market share and kick-start efforts to earn back their lost revenue. Businesses will know best how to go about this but there has to be stakeholder engagement with the Government and assistance in providing capital and other resources to the industry to being the catch home.