The Joint Apparel Association Forum (JAAF) is working with the authorities ahead of the new GSP framework from 2024, said JAAF’s new Secretary General Yohan Lawrence in an interview with the Sunday Observer Business last week.
Continuation of the special trade concessions offered to Sri Lanka beyond 2023 depends on the country’s compliance with the 27 EU conventions.
The conventions ratified by Sri Lanka cover human rights, labour rights, environmental and climate and good governance principles.
A five-member EU delegation met the Sri Lankan authorities in October last year to assess the progress of Sri Lanka’s pledge to comply with the conventions following a special resolution adopted by the European Parliament in June the same year.
Retaining GSP+ is a massive priority not only for the industry, but for the country at large as a number of sectors depend on this to maintain their access to the EU.
For the sector to grow the country needs to enhance access to key export markets, which will significantly boost its market share, Lawrence said.
The EU is Sri Lanka’s largest trading bloc accounting for over 30 percent of the country’s total exports in 2020 of which textiles and apparels accounted for around USD 1.8 billion worth of exports.
GSP+ privileges with the European Union (EU) and other key trading partners is not just essential, but crucial at this juncture. Before the advent of Covid-19, it was probable that Sri Lanka would ‹graduate› from the GSP+ regime; the pandemic, however, changed this dramatically. Now, retaining those privileges beyond December 2023 is being and should continue to be advocated forcefully and intensely, Lawrence said.
On the forex crisis he said the government is working out some fiscal policy reform measures and added that the apparel industry is engaged in dialogue with the authorities on foreign-exchange related issues and regulations that can ensure sustainable growth.
The apparel sector, according to the JAAF Secretary General, had shown much resilience despite the disruptions to the global supply chain in the past two years.
“We had major disruptions in our supply chain during 2020 which made functioning of the industry particularly challenging. That said, thanks to support from the Government we were able to continue to operate albeit at much lower levels and we were able to achieve the target of US 5.1bn for 2020.
“Despite various challenges experienced over the course of last year, the sector displayed great resilience and adaptability to the challenges we faced, Lawrence said adding that one of the results of the disruption to the supply chain however was an unparalleled increase in freight rates for inward and outward cargo and this has resulted in companies taking a heavy hit.
“Maintaining customer critical “on time deliveries” was exceeding challenging and fortunately our deep non transactional relationships with our customer base meant that we were able to work with our customer base to manage their expectations of deliveries during the exceedingly difficult period of the pandemic, he said, adding that the secret behind the sector›s strong footing in exports is our capacity to adapt and innovate our supply chains and products,” he said.
Here too the setting up of the Eravur fabric park will play a role in the post pandemic recovery as having more fabric closer to our needle point will help to prevent against the external shocks that the pandemic brought.