Sri Lanka plans new customs, labour rules to avoid 12.5% US tariffs

The Jaya Container terminal in Colombo, Sri Lanka. The US is Sri Lanka’s single largest export market, accounting for about US$3 billion in mostly apparel shipments. (EPA Images pic)

COLOMBO: Sri Lanka plans to strengthen its customs screening to better identify imported goods made with forced labour and to implement international labour standards in an effort to avoid being hit by new US tariffs on its exports, a top official told Reuters.

The US is Sri Lanka’s single largest export market, accounting for about US$3 billion in mostly apparel shipments.

“Sri Lanka already has good labour practices within the country. There is already a legal framework. Sri Lanka will take measures to eliminate concerns over child labour and forced labour,” Anil Jayantha Fernando, the country’s deputy minister of finance and planning, said in Colombo on Thursday.

The island nation is included in a group of 60 economies facing proposed new US trade tariffs of up to 12.5% that could come into effect next month. Sri Lanka’s 12.5% tariff is higher than competitors such as Bangladesh and Pakistan at 10%.

The country’s apparel industry reported US$5 billion in overall exports last year and is Sri Lanka’s second-largest foreign exchange earner, employing around 300,000 workers.

Exports dipped 7.4% to US$1.53 billion in the first four months of the year, government data shows.

Sri Lanka will introduce measures to improve screening at customs to address US concerns over imports that could have utilised forced labour practices and will adopt the International Labour Organisation’s C190, Fernando said.

The convention, the first international treaty to recognise the universal right of everyone to work free from violence and harassment, was ratified by Sri Lanka in April.

Fernando said talks with the Office of the United States Trade Representative (USTR) are ongoing, but Sri Lanka does not yet have plans to visit the US to meet with USTR officials.