Sri Lanka apparel industry recently called on its government to trade negotiations with Russia, mainland China, Japan and Brazil, and hoped that India will expand the existing trade concessions to Sri Lanka to reduce Sri Lanka's dependence on the European Union and the United States.

The representative office of Sri Lanka clothing industry, Joint Apparel Association Forum (JAAF), Rohan Masakorala, said: "at present, more than 90% of the exported garments are exported to the United States and the European Union, but there are also other good markets such as Japan and Australia, and our competitors have already been granted preferential treatment to these countries."

"As our competitors have already negotiated trade agreements, we have suggested that the government negotiate trade agreements with appropriate countries in our 5 year industrial policy report," he said.

The current export market of Sri Lanka garments is concentrated in the United States and the European Union is considered a risk.

In addition to the recent loss of tariff free preferential treatment for EU garment manufacturers, exports to the European and American markets have also been affected by the economic downturn of the two major markets.

Masakorala said, "the new market can not immediately replace the United States and the European Union.

But in the long run, the new market will generate new opportunities for economic growth and reduce the risk of excessive concentration of the market.

Clothing is the largest export item in Sri Lanka, but only India and the EU have given preferential treatment to the Sri Lanka garment products to enter the two markets.

According to the India Sri Lanka trade agreement, India offers 3 million Sri Lanka duty-free import concessions annually, and does not restrict import ports, and does not need to use India cloth restrictions.

Another 5 million pieces of Sri Lanka garments made of cloth made in India can be imported into the India market at zero tariff rate or enjoy a preferential tax rate of less than 75% of the common duty rate (margin of preference).

The EU has since August 15th (2010) revoked the export of garments from the EU to the EU market with a preferential tariff rate. Sri Lanka will no longer apply the generalized preferential tariff regime (GSP+) scheme to EU garments, but it can be applied to the EU GSP general concession scheme.

The Sri Lanka garment industry says it has not yet benefited from GSP in the US, but the proposal is still under review.