Mar 28, Colombo: Sri Lanka has not experienced any adverse effect on the economy with the suspension of the European Union’s Generalized System of Preference plus (GSP+) trade facility to Sri Lanka, President Mahinda Rajapaksa said today.
During a meeting with the foreign correspondents, the President has said that there EU’s removal of GSP+ facility had no effect on the economy as there are more orders for Sri Lanka’s garment industry.
“All fears of harmful effects with GSP + removal have not materialized,” the President told the reporters.
In the event of the USA removing its GSP to Sri Lanka, the country will have to face this challenge and will overcome it, too, the President has asserted.
Despite losing the European Union’s GSP+ tariff concession in August 2010, the exports of garments to EU in December increased by 33.9%, the Central Bank figures showed. Exports of garments to the US increased by 31.4% during the same period.
The European Union, citing Sri Lanka’s failure to meet human rights conventions relevant for benefits under the scheme, in August 2010 suspended the GSP+ tariff concession for Sri Lanka that provided tax free access to European markets for the country’s products, especially for garment exports.
Last month Sri Lanka told a visiting European Union delegation that it does want to renegotiate the withdrawn GSP+ tariff concession and it is a “closed book”.
Minister Tissa Vitharana, has told the IRIN news agency that “The GSP Plus suspensions did not have a negative impact on the Sri Lankan economy, exports and apparel industry.”
Foreign buyers are continuing to place orders for Sri Lankan garments due to their high quality, and timely and efficient delivery, Chamara Hettiarachi, a Colombo-based economist told IRIN. He has said that the textile industry had maximized capacity by appropriate use of technology.