Sri Lanka’s leading exporters say the expected loss in the garment sector alone would be around US $ 520 million or around, they say that currently 90% of exports outside the UK to the EU alone enjoy GSP + concessions.
The European Parliament has recently warned that Sri Lanka could lose its GSP + tax concessions as well as anti-terrorism assistance if it does not deliver on its promises to protect human rights, including the repeal of the Prevention of Terrorism Act.
Sri Lanka’s leading exporters point to the loss of US $ 350 million in revenue from the suspension of GSP + in 2010 due to human rights abuses during and after the civil war.
The National Board of Exporters of Sri Lanka (NCE) says the impact of the GSP + loss will be reflected in the loss of export value mentioned above, and that Sri Lankan exporters will have to compete with low-cost countries, including Bangladesh, under unfavorable conditions.
They say Sri Lanka needs a 12% discount to compete with those low-cost countries in the European market, and that the real loss is far greater than the amount of discounts lost in 2010 due to the loss of buyers, which was a loss experience in 2010.
The National Board of Exporters of Sri Lanka points out that the loss of GSP + will not only be reflected in the decline in export earnings, but will also have a detrimental effect on the value added export economy, including garments, and jobs in the garment sector, which plays a significant role in employment in particular.
Tully Cooray, general secretary of the Joint Apparel Associations Forum (JAAF), told the media that if Sri Lanka loses the GSP + concession, the apparel industry risks losing more than $ 500 million worth of export opportunities within a year.
He explained that the concessions were based on the cost of exporting the goods, and that when the tax relief was lifted and the cost increased by about 10 percent, Sri Lanka could face unequal competition with other countries and fall out of business altogether.
Major sectors of Sri Lanka’s export economy such as apparel, fish, rubber and ceramics directly benefit from the EU GSP + trade concessions.
Commenting on the risk of losing GSP +, Sri Lankan Ambassador to the European Union Grace Asirwadam warned that Sri Lanka’s exports to the EU would be unfavorable and that Sri Lanka would lose not only GSP Plus but also EU export markets.
She was speaking at a recent online conference on “GSP +: Past, Present, Future” organized by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) and the Colombo Chamber of Commerce.
Anton Marcus, general secretary of the Free Trade Zone Employees’ Union, told reporters that the government should take sole responsibility if the EU withdraws GSP + concessions. He added that their role as trade unions is to ensure the job security of workers and to work together to improve their living standards.