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GSP+ Loss $ 750 Million – EASL Chairman

By Paneetha Ameresekere

The loss caused to the apparel industry due to the withdrawal of the GSP+ facility is US$ 750 million, immediate past chairman of the Exporters’ Association of Sri Lanka (EASL), Dawn Austin said.
Austin, speaking at EASL’s 16th AGM held in Colombo on Thursday (July 25) said that this estimate covers a period of three years.
Additionally some 60-70 other products were victims of the GSP+ loss, she said.
GSP+ facility allowed Sri Lanka to export a few thousand items on a duty free basis to the EU, its largest export market. Chief among the beneficiaries was garments, the island’s largest tangible export commodity, though there were several other exports such as fish and ceramic related exports, which too suffered as a result of the loss of this duty free concession.
Sri Lanka frittered away the GSP+ facility in August 2010 for not investigating alleged human rights abuse in the closing stages of its war against LTTE terrorism.
Norway, New Market
Austin offering a ray of hope said that Sri Lanka has been included as being eligible to export to Norway on a duty free basis or under a concessionary duty free regime from this year. Norway is not a member of the EU. Apparel exports to Norway under this scheme are duty free, she said.
Sri Lanka exported some Rs. 2.5 billion worth of goods to Norway last year, with 40% of those being garments, she added.
Meanwhile the country’s exports in the first five months of the year fell by 6.6% year on year (YoY) to US$ ($) 3,853.6 million, though having picked up last month (June), EDB Chairman Bandula Egodage told this forum, about 3-4-5% growth, he said, without elaborating.
EDB Director General Sujatha Weerakoon told this reporter that exports in June showed a figure of $ 810 million or thereabouts, but lower than the figure recorded in June 2011, of $ 1 million. 2011 is considered one of the best years for exports for the island, where exports grew by 22.4% YoY to $ 10,558.8 million, only to see it fall by 7.4% YoY to $ 9,773/50 last year.When Weerakoon was asked whether the turnaround in exports in June was a reflection of things to come, she remained cautious and non-committal. Trade figures for June are not yet out.
Exports down

Meanwhile exports in May 2012 declined by 1.5% YoY to $ 793.9 million.

Hayleys Chairman, Mohan Pandithage, the chief guest at this occasion said that his company achieved a 19% YoY growth in exports to $ 360 million for the financial year ended March 31, 2012, comprising 3.1% of the island’s total export earnings, he said.
It’s unclear whether this figure also includes services exports, where Hayleys has an exposure to the leisure and BPO industries as well.
He attributed this increase to value addition. The company exports agriculture products, activated carbon, coir products and medical gloves, with the latest addition being an “electrician’s” glove, which he said could be used for both domestic and industrial purposes.
Pandithage further said that Sri Lanka needs to go beyond the export of tea in packets and bag form to extract the oil in the leaf. This oil may be of use to the pharmaceutical industry and also as a food additive.
He added that they have begun a strategy of diversifying their exports by searching for markets in Asia, Latin America and Africa for their processed rubber products. Sri Lanka’s principal export markets on an overall basis are the USA and EU.
Newly elected EASL Chairman, Rohan P. Daluwatte in his speech said that Sri Lanka’s “R&D” spend was low, at 0.11% of GDP.

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