The Sri Lanka Garment Buying Officers Association (SLGBOA) recently revealed that a steady fall has been witnessed in its apparel shipments to the US and EU since the country lost its GSP+ concession facility earlier this year.
Secretary SLGBOA Hiran Bandaranaike noted that although Sri Lanka initially enjoyed the GSP+ concession from the EU, the loss of this concession has had a dribbling effect on its apparel exporters even to the US, which is the second largest importer of Sri Lankan apparel.
The psychological effect that one market lays on other is also a reason for the underlying drop in demand in the US markets. Around 94.5 per cent of Sri Lanka’s overall apparel exports are towards two importers, the US and EU, Bandaranaike said.
Sri Lanka’s apparel shipments to the US during January to August 2010 registered a fall of 4.6 per cent and were recorded at US$ 833 million, as against US$ 873 million during the corresponding period last year, he said.
He pointed out that although Sri Lanka positioned itself as the eighth largest supplier of apparel to the 27 EU nations, it was certain to lose this position with the withdrawal of the GSP+ concession on 15 August.
“It is a well accepted fact that the loss of the GSP+ concession would have many adverse impacts on the Sri Lankan apparel sector. It is apprehended that, as more and more number of European buyers feel that the country’s apparel are not able retain their competitiveness, they may thus move to producers in other countries,” he added. Sri Lanka may continue losing a major chunk of its apparel exports to the EU, which is also expected to claim thousands of jobs in the sector in the short term. As per the estimates of the Joint Apparel Association Forum, apparel exports which constituted as the country’s main industrial export may drop by some 10 to 15 per cent, this year, Bandaranaike said.
He added that the Sri Lankan Government needed to carry out a dialogue with the EU and strike a mutually-beneficial deal, while ensuring the regaining of the GSP+ facility as soon as possible.