Renewal of GSP welcomed by exporters | Sunday Observer

Renewal of GSP welcomed by exporters

Exporters to the United States welcome the renewal of the GSP facility to Sri Lanka, a move that will spur exports to one of the largest export destinations even though the extension of the trade facility came a bit late.

Sri Lanka regained the United States Generalised System of Preferences (GSP) following the signing of the Budget Bill last Friday by President Donald Trump according to a statement by the US Embassy in Colombo.

National Chamber of Exporters President Ramal Jasinghe said the chamber welcomes the signing of the renewal of the GSP facility signed by President Donald Trump. This is a welcome relief to the service providers and manufacturers of around 3,000 products which are exported to the US, enjoying this facility.The delay in renewing this facility affected items such as plastics and ancillary products.“We look forward to this development with much enthusiasm and seek to explore all possibilities of increasing our exports to the US who is our leading trading partner,” Jasinghe said. The US GSP for Sri Lanka and other beneficiary countries expired on December 31 last year since the Congress did not authorize the GSP prior to adjourning for the year. The impact of the non renewal was that the trade concession eligible imports to the US by beneficiary states such as Sri Lanka were subjected to non preferential duties from January 1 this year.

Sri Lanka along with other beneficiary countries was lobbying for the renewal of the GSP facility. According to statistics, the United States imported goods to the tune of US 2.8 billion from Sri Lanka in 2016.

Around 3500 products from Sri Lanka have access to the US market duty free under the trade concession.

Sri Lanka Food Processors Association President Maliek De Alwis said the Association welcomes the renewal of the US GSP which will help accelerate exports to the US.

However, trade experts said the termination of the trade facility did not affect Sri Lanka’s exports as the US is not a large market for many products.

The items comprise agriculture and fishery products, jewellery, carpets, selected varieties of chemicals, minerals and marble. However garments which remain Sri Lanka’s single largest export item to the United States is not eligible for the GSP

Sri Lanka’s exports increased 10.2 percent US$ 11.36 billion in 2017 from a year earlier with tea exports growing by 20 percent, seafood 41.9 percent and garments 3.0 percent, Central Bank data reveals.

However, the trade gap continued to widen with imports rising 9.4 percent to US$ 20.98 billion. The trade gap expanded to US$ 9.62 billion from $ 8.873 billion a year earlier. Sri Lanka US trade stood unchanged in 2015 and 2016 at US$ 3.3 billion. Apparels were the largest export item to the US accounting for around 75 percent of the exports to US in 2016. Bilateral trade between Sri Lanka and the United States increased US$ 3.41 billion from January to November 2017 compared to $ 3.3 billion in the previous year.