The Free Trade Zone Manufacturers Association (FTZMA) yesterday in a statement stressed the need for an urgent and short-term strategy to protect Sri Lanka’s market share in the EU, in a proactive manner.
Acknowledging that the withdrawal of GSP Plus would have serious and negative consequences on the country’s export industry, the FTZMA said it is imperative for the government to take a proactive approach in resolving the hurdle without “speculating upon reactive measures on what next comes from the EU”.
“The economy of our country is majorly driven by the SMEs but due to the pandemic, those enterprises are already being hit badly.
The GSP withdrawal will throw them out of the frying pan into the fire, as not only textile but about 7500 tariff lines, which cover almost all the industrial exports from Sri Lanka to Europe, will suffer in case if Plus is withdrawn and therefore unlike previously, with the cascading effects of the pandemic, it will cause a catastrophic impact to our economy,” the FTZMA statement noted.
To help the government secure the concession, the FTZMA said it would contribute to the efforts by: monitoring the extent to which the member associations fulfil treaty obligations, advocating for improvement and acting as a partner to communicate the views of the Sri Lankan public.
The FTZMA said that by assisting the government to achieve the scheme’s conditions, it would continue to uphold labour and human rights and safeguard the workforce of the members from the negative impacts of the pandemic.
Furthermore, the association reiterated that the impact of losing the EU GSP Plus this time around is expected to be immense since the COVID-19 pandemic has had a debilitating impact on the economy, resulting in weakening Sri Lanka’s balance of payment (BoP) and increasing the unemployment rate.
It shared that unlike standard bilateral trade deals, GSP Plus has a nonreciprocal nature towards the beneficiary exporting country.
The FTZMA added that the concession enabled the Sri Lankan exporters to have a competitive advantage over the none GSP Plus nations, thus has led to the creation of thousands of additional job opportunities for locals, thereby elevating their incomes and lifestyles.