Apparel manufacturers catering to the domestic market should get ready to become exporters under the government’s new trade policies, head of the top apparel lobby group stressed recently. Outgoing Joint Apparel Association Forum (JAAF) Chairman Noel Priyathilake noted that the unity government is moving towards abolishing past protectionist policies systematically, for which JAAF should also offer its expertise. “Our members who are catering to the domestic market should get ready to be exporters as well rather than concentrating on the domestic market,” he said.
He noted that the companies that were catering to the domestic market however had not asked for protectionism and demanded the industry to become counter-productive.
Many other industries have been lobbying the government to continue past protectionist policies.“Therefore, we as a responsible organization shall ensure that the structural adjustment package being offered to vulnerable industries by the government under the trade reform agenda be made available to our members who are presently catering to the domestic oriented market as well,” Priyathilake said.
The government will be providing Sri Lankan industries a trade adjustment package in order to allow them to train personnel and have a level playing field with large scale foreign companies that are expected to invest in Sri Lanka following the signing of several Free Trade Agreements (FTA).
While the apparel sector has made a commitment to create 20,000 jobs in economically lagging regions, Priyathilake noted that given the labour scarcity, the industry may have to resort to greater automation in urban areas as well.
Meanwhile, he said that FTA negotiations with China have seen positive momentum, with Chinese authorities offering flexibility in the country of origin rules, which does not demand double transformation—which requires fabric used for final production to be woven in the same country.
In the case of the Economic and Technology Cooperation Agreement (ETCA) to be signed with India, he said that quotas applied to Sri Lankan apparel in exporting to India through the existing FTA have to be removed through the early harvest programme, without which, ETCA would not be beneficial for the apparel sector.
“Singapore is not an important trading destination to us as at date, they will not offer significant market access to us,” Priyathilake commented on the 3rd country Sri Lanka is negotiating an FTA with at the moment.
While praising the Sri Lankan government’s effort to regain preferential access to the European Union, he further added that the government’s attempts to gain further market access into the US is also welcome, though the success of the exercise depends on the policy stance of the new US administration.