UK acknowledges GSP + importance to Sri Lanka

The UK has affirmed that Sri Lanka’s exports would receive the same treatment as it did under the trade concessions it obtained under the European Union ( EU) preferential trade agreements.

UK High Commissioner Sarah Hulton addressing the post business session of the Annual General Meeting (AGM) of the Sri Lanka Apparel Exporters Association ( SLAEA) at the Cinnamon Grand on Wednesday stated “Sri Lanka will continue to benefit the way it did at the time of transition ( Brexit) and the trade preferences.”

The UK will be establishing a Most Preferred Value that would be worked out for products from January 1, 2021, she noted.

The high commissioner noted the UK recognises the role that the trade concessions from the EU under the GSP + scheme have played for Sri Lanka.

It was pointed out that 53 per cent of Sri Lanka’s imports to the UK entered under this scheme and this trade preference would continue under the new system.

Finance Ministry Secretary S. R. Attygalle, addressing the industry, assured that the apparel park ( in the East) would be established as soon as possible but noted that the challenge for the industry would be to achieve US$10 billion by 2025.

He also called on the industry to ensure they spread their presence into the Uva, Northern and North Central provinces.

“We expect a fairly low interest rate regime,” he said adding that the industry expects a public sector well- versed with the current situation, for which the government would achieve.

In addition the future public officials with the young officers taking charge would be geared to adapt to future demands even though reforms may be difficult.

A regime of high tax rates “gets economies into trouble,” Mr. Attygalle said adding that it is more important to increase disposable income.

He noted the Inland Revenue Department ( IRD) amendments (to be gazetted last Friday) would revitalise the economy.

Th e F i n a n c e M i n i s t r y Secretary also explained that due to large sums of unaccounted and unpaid bills the budget deficit for this year is likely to increase to 7.5 per cent from the previous expected figure of 5 per cent.

SLAEA Chairman Rehan Lakhany addre s s i n g the gathering highlighted that they should go beyond orthodox thinking and ensure that departments like the Customs be re- organised to become a facilitator in the process of carrying out their business.

He also requested authorities to give their full attention to the Eravur fabric park of importance to the sector as it would mean reducing the time to get the raw material to the factories.

Mr. Lakhany citing the industry’s current target of achieving $ 10 billion by 2025 wondered about the reason for attempting to double the current earnings and said, political stability is expected by the end of the next Parliamentary elections.

Noting that the clothing industry is rapidly changing, he pointed out that e- commerce is impacting growth to double digits.

The industry is said to be looking forward to new models of business and the Sri Lankan exporter could create a new earnings with an additional $ 300 million for this sector alone by engaging in order, supply and quality management.

Mr. Lakhany pointed out that while there are only three more years for concessions under the GSP + to the European Union (EU) the country remains dependant for its raw materials from overseas. Further, the Brexit or Britain’s exit from the EU has posed another challenge to the industry.

Trade dialogues based on preferential arrangements with the EU, UK, India and China need to be worked out, it was noted.

He also called for improvement in the e- documentation and that the Finance Ministry take over the work and ensure Customs complies with these changes.

Mr. Lakhany citing the industry’s current target of achieving $10 billion by 2025 wondered about the reason for attempting to double the current earnings and said,