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GSP+ Removal and the Apparel Industry in Sri Lanka

Author

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  • Ashani Abayasekara

Abstract

The withdrawal of GSP+ concessions granted by the European Union in August 2010 could bring about important implications for Sri Lanka’s apparel industry, which is heavily dependent on the European market for its exports. A particular concern is the lack of an international level-playing field, with many of Sri Lanka’s competitors having preferential access to European countries. In this context, the study analyzes the current impact of GSP+ withdrawal on the Sri Lankan apparel industry, possible future impacts and means of mitigating negative impacts and moving forward. An empirical analysis indicates that the GSP+ scheme has been central for apparel exports in penetrating the EU market, with the utilization rate averaging at 72 per cent over the 2005–2010 period and declining thereafter. While interviews carried out with stakeholders in the apparel industry reveal diverse viewpoints, the study concludes that the apparel industry remains highly vulnerable to the loss of GSP+ concessions and proposes several strategies in moving forward.

Suggested Citation

  • Ashani Abayasekara, 2013. "GSP+ Removal and the Apparel Industry in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(2), pages 293-316, September.
    • Handle: RePEc:sae:soueco:v:14:y:2013:i:2:p:293-316
    DOI: 10.1177/1391561413500177
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    References listed on IDEAS

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    1. Keck, Alexander & Lendle, Andreas, 2012. "New evidence on preference utilization," WTO Staff Working Papers ERSD-2012-12, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Janaka Wijayasiri, 2007. "Utilization of Preferential Trade Arrangements: Sri Lanka's Experience with the EU and US GSP Schemes," Working Papers 2907, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    3. Suwendrani Jayaratne & Deshal De Mel & Dharshani Premaratne, 2011. "Utilization of Trade Agreements in Sri Lanka: Perceptions of Exporters vs. Statistical Measurements," Working Papers 9611, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    4. Gasiorek, Michael & Holmes, Peter & Rollo, Jim & Wang, Zhenkun & Gonzalez, Javier Lopez & Parra, Maximiliano Mendez & Maliszewska, Maryla & Paczynski, Wojtek & Cirera, Xavier & Willenbockel, Dirk & Fo, 2010. "Mid-term Evaluation of the EU’s Generalised System of Preferences," Conference papers 331999, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    Citations

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    Cited by:

    1. Prema-chandra Athukorala & Raveen Ekanayake, 2014. "Repositioning in the Global Apparel Value Chain in the Post-MFA Era: Strategic Issues and Evidence from Sri Lanka," Departmental Working Papers 2014-17, The Australian National University, Arndt-Corden Department of Economics.
    2. Prema†chandra Athukorala & Raveen Ekanayake, 2018. "Repositioning in the global apparel value chain in the post†MFA era: Strategic issues and evidence from Sri Lanka," Development Policy Review, Overseas Development Institute, vol. 36(S1), pages 247-269, March.
    3. Shah Mehmood WAGAN, 2015. "Export boost of textile industry of Pakistan by availing EU’s GSP Plus," Journal of Economics Library, KSP Journals, vol. 2(1), pages 18-27, March.
    4. Jayatilleke S. Bandara & Athula Naranpanawa, 2015. "Garment Industry in Sri Lanka and the Removal of GSP Plus by EU," The World Economy, Wiley Blackwell, vol. 38(9), pages 1438-1461, September.
    5. Wagan, Shah Mehmood, 2015. "Export boost of Textile Industry of Pakistan by availing EU’s GSP Plus," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 18-27.

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    More about this item

    Keywords

    Apparel industry; European Union; GSP+ concessions; preferential access; utilization rate;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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