Trans-Pacific Partnership spells trouble for Lankan apparel sector

29 September 2015 02:51 am - 0 - {{hitsCtrl.values.hits}}

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The signing of the Trans-Pacific Partnership (TPP) agreement touted as the ‘21st century trade agreement,’ could spell trouble for the Sri Lankan apparel sector and Sri Lanka must ask for similar treatment, according to a leading economist.
“Look at the Trans Pacific Partnership. Vietnam is signing and they’re going to have a low-duty or duty-free access to the US market on apparel,” Dr. Indrajit Coomaraswamy said.
The TPP is a proposed expansion of the Trans-Pacific Strategic Economic Partnership signed between Brunei, Chile, Singapore and New Zealand. Eight other countries will be entering the TPP.
The US is the world’s largest importer of apparel. According to the Vietnam government, the TPP will boost Vietnam exports to the US by 13-20 percent till 2017 with export totals of US $ 25-30 billion.
“What is the impact on us? That is another thing we need to think if they sign it and they are close to signing,” Dr. Coomaraswamy questioned.
Vietnam believes that signing the TPP will bring in US investments to localize more raw material production in Vietnam, increasing locally sourced raw materials to between 60-70 percent. Vietnam employs over 2.5 million workers in the apparel sector in 4,000 garment factories.
Around 350,000-400,000 workers—85 percent of whom are women—are employed in the apparel industry in Sri Lanka.
Sri Lanka’s total apparel exports to the world in 2014 was US $ 4.7 billion, according to the Industry and Commerce Ministry, of which US $ 1.99 billion went to the US. Sri Lanka caters to the mid and high-quality brands in the US including Victoria’s Secret, Nike, GAP and Calvin Klein.
Ministry figures also show that the US took in 24 percent of Sri Lanka exports valued at US $ 2.7 billion in 2014.
“The US apparel market is the biggest. So what we have to tell the Americans is that ‘if you want this transition to work, give us the same deal’,” Dr. Coomaraswamy said.
Sri Lanka had attempted to broker a Trade & Investment Framework Agreement with the US during the 2001-2004 UNP rule, which was abandoned with the regime change.
Dr. Coomaraswamy said that Sri Lanka should attempt to enter into a multilateral trade agreement such as the TPP or other bilateral trade agreements, since trade liberalization under the Doha Rounds of the World Trade Organisation has come to a standstill. (CW)

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Trans-Pacific Partnership spells trouble for Lankan apparel sector

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