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Stilanka:Export earning to drop by 20 pc with expiry of PTA |
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2004-11-17
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A sharp drop of 20 percent next year in terms of export earning from the US is anticipated by the local garment and textile industry, following the expiration of a preferential trade agreement (PTA), an industry official said yesterday. About $2.5 billion worth garments and textiles were being purchased from Sri Lanka by the United States since the two countries signed the Multi-Fibre Agreement in 1974.
However, the agreement is set to expire next month.
As per Tuli Cooray, who heads a committee of Sri Lankan business and government officials advising the industry, American buyers will source from lower cost manufacturers in China, Mexico and elsewhere in South Asia rather that Sri Lanka. Due to this, garments and textiles exports to the US will likely fall about 20pc to about $2bn, in 2005, he stated.
He said to remain in business, small and medium garment manufacturers would have to downsize, but a rebound could be expected if the focus is shifted to markets closer home - India and Japan. "We don''''t envisage any serious shocks," Cooray informed.
"We have already initiated talks with Indian partners amid efforts to obtain a piece of that market," he said.
Textiles and garments comprise 50pc of Sri Lanka''''s total export earnings, and the US is its largest buyer of garments. |
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