At the twenty-seventh International Conference, the European Union approved the zero tariff entry in Sri Lanka.

This preferential policy will expire in December 31, 2008. Therefore, preferential policies must be reapplied in October this year.

If the application of Sri Lanka GSP is rejected, investors are bound to leave, so the situation is likely to be more severe.

Domestic manufacturers are eagerly looking forward to a more favorable and more relaxed production environment.

In an interview with India Fibre2fashion, Kumar Mirchandani, chairman of the sales Committee of the United dress Association, said that when deciding to re apply, the European Union will launch a technical review of Sri Lanka's past three years on the basis of the terms previously signed.

GSP + is crucial to Sri Lanka's industry and employment, especially the clothing industry.

Therefore, Sri Lanka urged the EU government to consider the high standard of labour and health benefits in Sri Lanka's factories, which is a positive basis for the re provision of GSP +.

Vietnam, Kampuchea and other countries are also scramble for the EU market to form fierce competition for Sri Lanka.

But what Europe needs to consider is that Sri Lanka has been able to maintain its production costs unchanged, though labor costs are high, electricity costs are high, and inflation is expanding.

Mr Kumar said that it is costly to comply with the best management practices. Therefore, in a competitive environment, GSP access right is very important for maintaining the industrial status of Sri Lanka.

However, Mr Mirchandani is optimistic about the return of the GSP. He suggested that Sri Lanka should make corresponding adjustments and necessary work in order to get preferential policies for GSP in the coming years.

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