Sri Lankan Apparel Markets Regain Sway Over EU Following Revival of GSP Plus

Trade & Policy

Sri Lankan Apparel Markets Regain Sway Over EU Following Revival of GSP Plus

Sri Lanka’s recently concluded pact with the European Union is fructifying in the form of double digit export growth figures for the apparel sector. Only recently Sri Lanka had re-formalized the Generalized System of Preferences Plus (GSP Plus) facility with the EU. The move was initiated following Sri Lankan government’s positive steps towards restoring human rights in the country.

Reaffirming the faith in the growth figures, Felix Fernando, President Sri Lanka Exporters Association, expressed the sentiment that the expected gains were accruing to the satisfaction of both parties concerned. He also extrapolated the trend and said “By the end of the year, the figures will be much healthier. Our expectations are proving true with the order books getting filled up.”

In addition, the Joint Apparel Associations Forum (JAAF) issued data that reinstated the claim of Fernando. The data revealed that apparel exports from Sri Lank to the EU had expanded by 14.29 per cent Y-o-Y in the August of 2017. The aggregate had reached USD 192 million.

Reiterating his claim, Fernando pointed out that right now the manufacturers have developed a positive outlook on future orders. This indicates that the apparel sector has the capacity to absorb or create 20 per cent excess growth within a year’s time of being subject to GSP benefits. The one year period will end June 2018.

In the previous year, spanning the same tenure, Sri Lanka had registered a fall of 2.91 percent in apparel receipts from the EU and the figures stood at USD 1.89 billion. The contributing factors to this decline included Brexit and other such political upheavals that took place in Europe. This was also compounded by the downsizing of operations by European department stores in placing apparel orders from Sri Lanka.

Currently the growth figures stand at 15 percent for the Sri Lankan apparel sector. “We hope that the European market grows at 20 percent in the forthcoming season. However, the current growth figures are also pretty healthy,” voiced Fernando.

It took one-and-a-half months for the ratification of the agreement with the EU for the market expansion to commence in earnest. The expansion fructified in the month of July. The export figures grew 10.34 percent Y-o-Y subsequently.