Sri Lanka apparel industry downplays loss of EU trade deal

July 08, 2010 (LBO) – The end of a trade deal giving duty free market access to Europe will not be a ‘catastrophe’ though it would squeeze already thin profit margins, an industry official said. A Sukumaran, a clothing exporter who is chairman of the Joint Apparel Association Forum, an industry body, said they were looking at ways to mitigate the loss of the GSP Plus deal when it ends in August.

“Only one-third of exports qualifies for GSP Plus,” he told a business forum organised by the Ceylon Chamber of Commerce. “Two-thirds of exports are not affected by the loss of GSP Plus.

“For the one-third of exports affected the loss of GSP Plus is an issue but it’s not a catastrophe,” Sukumaran said.

“If exports drop there certainly will be a reduction in employment. But today there’s a labour shortage in the apparel industry and we’re able to absorb even 25,000 people.

“Some factories may close but others can absorb labour. And I’m not sure if there are going to be major closing down of factories.”

He said he expects apparel exports, the island’s main industrial export, to drop by 10-15 percent this year to around 2.7 – 2.8 billion US dollars from last year.

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