Sri Lanka peace, stability help exporters cope with GSP loss: Central Bank

July 01, 2010 (LBO) – Lower interest rates and inflation, ending of a war, reduced war risk premiums, strong foreign reserves and better access to foreign capital markets will help exporters cope with the loss of European trade preferences, the Central Bank said. Sri Lanka is due to lose the Generalized System of Preference Plus benefit which gives access to European Union markets on August 15 over a perceived refusal by the state to grant rights to citizens under several international covenants signed by the country.

On Thursday the United States said it would also review GSP concessions given to Sri Lanka following a complaint by a US trade union over labour rights.

The Central Bank said exporters had also improved productivity and work process at the level of their own firms.

EU countries accounted for about 50 percent of total apparel exports in 2009, and about 60 percent benefited from the GSP+ scheme, the Central Bank said.

The duty benefits under GSP were estimated at 78 million Euros.

“It must be noted that Sri Lankan industries have proven their resilience amidst challenges on earlier occasions,” the Central Bank said.

“The apparel sector, in particular, resisted strong competition from low cost garment producers of other