Sri Lanka’s apparel industry is hoping to dress up the Chinese by firming up the Free Trade Agreement (FTA) mid this year with a 2014 forecast of around US$4.6 billion in total trade even as the sector continues to struggle with limited access to the European Union (EU).
Apparel exports were estimated to top $4.2 billion in earnings for last year, market analysts predicted while speaking with the Business Times on Friday adding that they expect 2014 to be bullish.
Figures released for November indicate a 36.3 per cent increase compared to the same month in the previous year. Total exports from January to November show a growth of 11.4 per cent to $3.8 billion with the US bringing in earnings at $1.6 billion, up 18.9 per cent from the previous year and the EU at $1.7 billion, up 4.1 per cent and other countries’ earnings at $437.3 million, an increase of 16.8 per cent.
Sri Lanka Exporters Association President Yohan Lawrence told the Business Times that this year with the EU economy expected to grow under one per cent there would be a slow growth of apparel exports into that region. In this respect, analysts expect apparel exports to the EU to slow down this year.
The US market though was able to pull itself together and would therefore be capable of bringing in more revenue.
Meanwhile, the industry is looking at signing up the FTA with China mid this year, with no upper limit for garments into the country and duty free access to one of the world’s largest population.
Analysts observe that if the FTA should work out then it would ensure that within the next 2-3 years this market would be able to add to the growth in the apparel sector.
Recent announcements by the government that Sri Lanka has clinched the GSP deal for the next 10 years under the EU was considered “absolutely, nothing new” as the sector continuously avails itself of these concessions at present.
JAAF Secretary General Tuly Cooray said in an interview that the sector continues to receive the 2.5 per cent deduction from the duty payable for apparel exports to the EU and noted that this was a continuation of the GSP cycle after the completion of the 10 years ending in 2013.
While some countries were pulled out of the next EU GSP cycle since they had graduated to a higher level from their previous position, Sri Lanka continues to regain its concession since it is still considered a lower middle income nation.
In this respect, the apparel exporters’ access to the EU continues to be limited since the EU GSP Plus concessions were removed in 2010.