Sri Lanka Not Claiming Full Duty Free Access to US Under Its Generalized System of Preferences (GSP) Programme

23rd October 2009, www.lankabusinessonline.com

Sri Lankan exporters are not making enough use of duty free access to the United States under its Generalized System of Preferences (GSP) programme, officials said.

"It is necessary to educate our exporters about the duty free access to the US," said Gomi Senadheera, Sri Lanka's Director-General of Commerce. "There is much potential."

He said if exports eligible for duty free access makes use of the access the "opportunities for market expansion are very high."

There are a large number of products covered by GSP which are not exported to the US, he said.

Total two-way trade between Sri Lanka and the United States totalled 2.3 billion dollars in 2008, with US imports of two billion dollars and US exports of 283 million dollars.

The main US exports to Sri Lanka were aircraft, cereals, industrial machinery, electrical machinery and plastics.

US imports from Sri Lanka are mainly apparel, rubber, precious stones and industrial machinery.

Officials said that in 2008, US imports from Sir Lanka qualifying for GSP preferences were valued at 153 million dollars.

The US is the largest single market for Sri Lankan exports as much as 80 percent of which consists of apparel and textile products.

But a conference on US trade and investments in the island was told recently that according to trade statistics nearly 17 million dollars worth of GSP eligible goods from Sri Lanka had entered the US market in 2007 without claiming duty free benefits.

In 2008, the value of such Sri Lankan exports had risen to 18.7 million dollars.

This was because of lack of awareness among importers and exporters of the zero duty concessions offered under the US GSP programme and insufficient documentation, trade officials said.

The total value of US imports from Sri Lanka under the GSP programme was 172.05 million dollars in 2008 accounting for 9.1 percent of total US imports from the island.

The value of such imports in the first seven months of 2009 was 68.5 million dollars.