Demand for preferential access for garment exports

Apparel exports to the US can get affected if African countries block proposed tariff cuts on exports from developing countries. Sri Lanka’s trade comes under WTO rules.

WTO is working to put in place a rule based global trading system.

Tariffs continue to be a significant barrier in world trade. Under the WTO’s last Doha round of negotiations, an agreement was worked out for getting greater market access for non-agricultural goods from developing countries.

This agreement called Non-Agricultural Market Access (NAMA) covers all products not covered by agricultural agreements at the WTO.

Among the proposals are to bring down developing country tariffs for 16 apparel tariff lines. But opposition by African countries to the proposed tariff cuts could block potential gains for Sri Lanka under NAMA.

Presently, African countries have duty free access into the US, while other comparatively richer countries pay heavy duties to access the lucrative US market. Some countries from Africa are opposing the US move of tariff cuts for the rich countries.

The 15 to 35 percent duties which are paid by Sri Lanka and China is reducing their competitiveness and they are the biggest losers.

Sri Lanka’s 40 to 50 per cent exports are in non agricultural goods like apparel and most of that goes to the US. Sri Lanka exports goods worth two billion dollars to the US and duties are 220 million dollars.

African countries have identified 24 export products they want protection for, including garments and fish products. Countries like Lesotho, Kenya, and Mozambique export mainly garments, fish, and mineral products to the US and European Union. These products account for 60 to 90 per cent of their total exports to these two markets.