Apparel industry jittery over government’s firm EU stand

The Sunday Times
Sunday December 20, 2009
By Leon Berenger

The apparel industry facing withdrawal of concessionary tariffs from the European Union (EU) hit out at the government for the aggressive response.

External Development and Internal Trade Minister Progessor G. L. Peiris said the matter will be taken to an international tribunal, saying the EU was acting in a biased manner by holding out on human rights abuses in the country when the actual ground situation was different.

The Sri Lanka apparel industry, jittery over the European Union’s possible withdrawal of concessionary export trade tariffs, is critical of the government’s firm stance over the GSP (Generalised System of Preferences) Plus issue and its determination not to bend to EU pressure.

Industrialists say that taking the European Union “head on” over GSP Plus and Sri Lanka’s human rights record was not helping the Sri Lanka garment industry. “At this point, the government should be acting in good faith and working towards meeting the EU’s demands in the two-month grace period the EU has given,” Joint Apparel Association Forum (JAAF) chairman S. Sukumaran told the Sunday Times.
“This is a sensitive issue, but the government is handling it in the wrong way. This is an issue that directly affects some 275,000 full-time workers and another one million who are indirect beneficiaries of the apparel industry,” Mr. Sukumaran added.

The apparel industry will not feel the impact of the EU ban until around April next year, the time when garment orders start coming in. “However, the industry is expecting the worst. We may be forced to start reducing manpower and taking other cost-cutting measures if the government remains inflexible in this matter,” Mr. Sukumaran said.

Trade unionists are also concerned, warning that the industry was heading for disaster if the government maintained its stubborn stance. According to Free Trade Zone Apparel Union president Anton Marcus, employers and the authorities should be working together to resolve the problem.
“The industrialists are non-committal and allowing the government to handle the matter,” Mr. Marcus said. “The government should come up with a road map and let the international community know what its position is.”

In the past six months between 50 and 75 apparel factories have closed down. Among other things, the European Union is demanding the implementation of the 13th and 17th Amendments to the Constitution and the formation of a Constitutional Council.

S. Liyanagama, Secretary to the Ministry of External Development and Internal Trade, told the Sunday Times that the government’s position has not changed, but declined to elaborate.