Fallout From Tsunami: Sri Lanka to Ask U.S. For Breaks on Tariffs

Looking to rebuild its economy, Sri Lanka, where 30,000 people were killed by the Dec. 26 tsunami, plans to petition the U.S. for trade breaks.

By and

Facing a steep climb to rebuild its economy, Sri Lanka — where more than 30,000 people were killed by the devastating Dec. 26 tsunami — plans to petition the U.S. government for apparel trade breaks.

The physical and economic disruption came at a critical moment for the Indian Ocean island nation’s economy, which was already at risk of losing its position in the garment industry as a result of the Jan. 1 lifting of quotas by the 148 nations of the World Trade Organization. Apparel exports account for more than 60 percent of Sri Lanka’s exports and lost business would take a heavy toll on the country in a year when the nation needs to rebuild.

“It’s time for people to help Sri Lanka,” said Gomi Senadhira, Sri Lanka’s ambassador to the World Trade Organization, in an interview in Geneva.

He said the Sri Lankan government plans to ask the U.S. and European Union to drop their duties on his country’s exports of textiles, apparel and footwear. U.S. tariffs average about 17 percent on apparel and EU duties average about 11 percent.

Although the tsunami destroyed much along the island’s coast, apparel factories, which are clustered inland, largely with 25 miles of the capital city of Colombo, experienced little damage. However, while their factories were largely unscathed, manufacturers noted that the roads and railroads they rely on for supplies and to ship goods have been battered.

That, combined with the threat of growing Chinese competition, could take a heavy toll on the nation of 19.9 million people. Last year, experts projected that Sri Lanka could lose as many as 250,000 of its roughly 330,000 apparel jobs to large competitors like China and India.

“There is no doubt that Sri Lanka’s general economy will need serious support in the medium- to long-term,” said Kumar Mirchandani, managing director of Favourite Group, a manufacturer on the island that employs 2,000 workers.

“The apparel industry is Sri Lanka’s biggest employer and supports over 1 million people directly and indirectly,” Mirchandani said in an e-mail message. “We cannot afford to lose any market share at all, given the overall needs of the general economy at this tragic time. Any loss of jobs will be devastating and greatly hamper rehabilitation for both the people and infrastructure of Sri Lanka.”

Page:  Next »
load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

getIsArchiveOnly= hasAccess=false hasArchiveAccess=false