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SL awaits EU confirmation for GSP+ on Indonesian fabric

A proposal to obtain GSP+ concessions on fabric imported from Indonesia has been submitted by the Sri Lankan Embassy in Brussels to the European Union (EU), according to Sri Lanka Apparel Exporters’ Association (SLAEA) Chairman, Felix Fernando.

Fernando said, however, that a response from the EU could not be expected soon due to the holiday season and the heightening political condition in Sri Lanka.

Sri Lanka was hopeful that agreements to obtain GSP+ concessions for South Korean and Indonesian fabric could be signed by the end of 2018.

According to Fernando, at the moment, apparel manufacturers could only get GSP+ concessions on fabric woven in Sri Lanka, the EU and SAARC countries.

Speaking on efforts to obtain an extended regional cumulation fabric agreement for Korean fabric, he said, the Department of Commerce had recently submitted an amended proposal to the Sri Lankan Embassy in Brussels and to Korean authorities. He said that once both parties were satisfied with the proposal, it would be handed over to the EU.

“Sri Lanka does not produce the necessary quality and quantity of fabric required for local manufacturers. Fabrics from the EU are expensive, hence many of our apparel manufacturers import textile from Asian countries like China or Thailand,” he said. Efforts made earlier this year for a cross-regional cumulation fabric agreement with Thailand proved futile.

According to the Central Bank, from January to September 2018, Sri Lanka imported textiles and textile articles worth US$ 2 billion, up 4.7% against the same period last year.

Speaking of the future of the apparel industry, he said Sri Lanka has a great opportunity to expand its apparel exports, as China is expected to leave a US$ 50 billion vacuum in the global apparel market from next year.
“China will not be expanding its apparel industry. The US$ 50 billion vacuum will be created as a result of a reduction in Chinese apparel exports and an increase in its domestic apparel demand. Most of China’s production will go to its domestic markets,” Fernando pointed out.

“This vacuum will mostly likely be picked up by Vietnam and Bangladesh. Sri Lanka also has an opportunity to export to China as well. Hence, the future can’t be very bad for Sri Lanka,” he said.

According to Joint Apparel Association Forum data, apparel exports to China were worth US$ 60.2 million, contributing to only 1% of total apparel exports from Sri Lanka. Exports to China in 2016 were US$ 66 million. According to foreign news reports, China’s textile and apparel exports were US$ 257 billion in 2017.

Author: TELO Admin