Apparel eyes Japan exports

Plans to formulate policies that will lead into an FTA and break into the US$ 24 billion market

By Cassandra Mascarenhas

The Joint Apparel Associations Federation (JAAF) has entered discussions with the Government to forge ties with Japan to formulate policy level decisions with the eventual expectation of drafting a Free Trade Agreement (FTA) and break into the US$ 24 billion market.

They are now working closely with the Director General of Commerce to compile relevant documentation. The opening of new markets was outlined in the five year strategic plan launched by the organisation and this resulted in policy adjustments included in the Budget that outlined ways to expand business in several countries outside of traditional markets, including Japan, Brazil and Canada.



Japan currently imports about US$ 24 billion worth of apparel but 70% to 80% of this comes from China. The country is now looking to break this over-dependency on China and diversify into new markets, opening the doors for Sri Lanka to enter negotiations with Japan.

“Japan is also over-dependent on China when it comes to imports and they too are looking to diversify. If China supplies them with about US$ 20 billion of their apparel imports, which leaves another four billion - if we are even able to get US$ 300-US$ 500 million from that, it’s still a big breakthrough for us. The Japanese too want to diversify their supply sources so in this background, we thought that there is a good rationale for us to move into Japanese markets,” explained the former Director General of Commerce and Advisor to JAAF K.G Weerasinghe.

Sri Lanka has so far depended solely on the US and EU markets and over 95% of the country’s exports currently go to these two regions. Although there is potential for further expansion within these two markets itself, with the US amounting to over a US$ 100 billion and the EU 70 to 80 billion euros respectively, Sri Lanka’s exports to the regions barely cover 2% of their requirements; however diversification into new markets has been highlighted as must by the JAAF in order to reach the export targets set.

Another pressing point made by the JAAF was the fact that several competing exporting countries including India and Bangladesh have entered free trade agreements, forging ahead and developing market access in new markets. Weerasinghe highlighted some examples such as Bangladesh which has duty free access to the EU, India which is in the process of negotiating an FTA with the EU and Indonesia which has entered an FTA with Japan.

“There is a need on our side to also have a policy response to what is happening elsewhere. We currently have FTAs with India and Pakistan, we had the GSP Plus with the EU but we no longer have that either; of course that’s a different issue but the point is that there is a pressing need for us to look at new markets,” said the former Director General of Commerce.