Sri Lanka has submitted the final papers to the EU, signed by both the government of Indonesia and the government of Sri Lanka to buy fabric from Indonesia.
This is to secure a complete duty waiver exporting to the European Union (EU) under the GSP + concessions.
The EU has virtually accepted the submission and the Sri Lankan government is waiting for the EU approval to go ahead with this initiative, Nimal Karunathilake- Acting Additional Director General of the Department of Commerce said.
In addition, Sri Lanka has come to final stage of making a joint submission to the EU, signed by the South Korean government and the Sri Lanka government to purchase fabric from Korea.
â€œSri Lanka mainly imports fabric from China even though China is not a beneficiary of GSP+ concessions. Now, weâ€™re trying to include both Korea and Indonesia. The work is still going on. The only thing is that it might take few more months and weâ€™re very positive that the EU will grant approval for these two proposals shortly,â€ Karunathilake told at a seminar held in Colombo last week, under the theme â€˜Brexit and its complications to Sri Lankaâ€™.
The event was organized by the Ceylon Chamber of Commerce.
â€œDespite the fact the Sri Lankan apparel manufactures continue to purchase fabric at a cheaper price from China, China doesnâ€™t have trade relation for duty concessions with the EU. For this reason, Sri Lanka is unable to fully utilize the full capacity of GSP+ concessions.â€ Karunathilake said.
Noting that the GSP+ utilization rate is relatively low, which is at 55 per cent, he added that country cannot just depend on the EU, the UK or the USA markets for exports. According to him, industries in China and India will play a major role in the global trade in the years to come. By 2030, China will overcome the USA as the largest economy in the world.
He said therefore Sri Lanka needs to look at these aspects and see whether the country could sign an FTA with China in the near future.