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Ambassador Blake's Remarks to Sri Lanka Apparel Exporters Association.

November 13, 2007 - Cinnamon Grand Hotel Oak Room

Ladies and Gentleman, I'm honored that Chairman Noel Priyatillake asked me to join you this evening on the occasion of your Annual General Meeting.  This is an impressive group, and I'm pleased to note one that includes several good personal friends of mine.

The apparel industry represents the leading edge of manufacturing success in Sri Lanka.  Your success also demonstrates the potential for other industries in Sri Lanka to emulate your accomplishments.  

First, the apparel industry, and your association in particular, plays a vital role in Sri Lanka's economy.  Your membership produces the majority of apparel exports from Sri Lanka to the United States-- a total market in 2006 of approximately $2.8 billion -- as well as over 70% of Sri Lanka's total apparel exports. 

Second, your sector is an important domestic provider of jobs.  You employ a workforce of approximately 270,000.  This workforce is predominately made up of women, and located often in rural areas where women have little access to training and employment.  So you are not just providing jobs, but you are providing opportunities to women who otherwise would have few economic prospects.

Third, you have made high labor and environmental standards an industry priority.  So at a time when manufacturers in other countries face charges of exploiting child labor, and forcing workers to work long hours in sweat-shop conditions, Sri Lanka’s apparel industry’s record has enabled you to promote your “garments without guilt” brand.   
I was also pleased to see that one of your member companies opened Sri Lanka's first eco-friendly apparel factory, and I understand that another company will follow before the end of the year.  This is to be commended. 

We all must to do more protect our environment and to ensure that there is a safe planet to leave our children.  Again, this is not just the right thing to do, it is also good business, because European and American consumers are increasingly interested in buying green products and that includes garments.

In the ever-expanding global economy, consumers are becoming more vigilant in wanting to learn both where consumer goods originated and how they were produced. 

The United States is a global leader in eco-friendly technology, and we are committing more resources to promoting the design, development, and production of environmentally-friendly technologies.

Many companies, acting on their own beliefs and/or because of the demands of their customers, are beginning to insist that all parties in their supply line – from an initial commodity to every value-added step in production and even possibly the transportation chain – adhere to ecologically sound business practices.  Although the numbers remains small, they will grow.  Being a leader in this arena will help put Sri Lanka on the "map" of green suppliers and to fill another emerging niche market. 

A fourth area where apparel has led the way for Sri Lankan industry is in demonstrating the capabilities of the Sri Lankan worker.  Thanks to the hospitality of many in this room, I have had the opportunity to visit many of your factories. 

Amidst all the successes I enumerated above, what impressed me most was the growing sophistication of your manufacturing processes and the adaptability of the Sri Lankan worker.  In factory after factory, an increasing proportion of each garment’s value is added in Sri Lanka.

In addition, because of the high education levels of your workers, more and more of the design work is being done in Sri Lanka.  And product innovation, the heart of any company’s future competitiveness and success, is a priority. 

Increasingly, the latest elastics, fabrics and other new innovations are being developed in Sri Lankan factories by Sri Lankan workers, often using advanced nano and other technologies.    

I think this is part of the reason that despite a higher per piece production cost than many other countries, Sri Lanka continues to draw orders from around the globe -- particularly from high-end brands in the United States and Europe. 

You have positioned yourselves, thanks to the efforts of many here tonight, both as specialists in up-market products and as a country which follows responsible employment practices. 

As with any industry, you face future challenges that will require you to maintain innovation and competitiveness.  One will be the expiration of U.S. safeguards against certain Chinese garment exports at the end of 2008. 

Part of the answer in maintaining your leading role in niche markets will be a continued strong focus on quality, innovation, and cost-efficiency.

Part of the answer is that Sri Lanka must continue to market itself as a leader in ethical business practices.  Sri Lanka is ahead of most other countries in Asia.  It has ratified the majority; of the International Labor Organization conventions including all eight core labor conventions of the 1998 ILO Declaration on Fundamental Principles and Rights at Work.  In addition to Sri Lanka's national commitments, your industry has adopted ILO Conventions on Minimum Age for Admission to Employment, Forced Labor and Child Labor.

From my visits to your factories I know they are well-run, employing quality workers in a safe environment.  Some companies take a holistic approach to not only produce garments in a good environment, but to also provide a good environment in which to enhance the lives of their employees. 

Using computer training, free medical check-ups, first-aid classes, subsidized meals and other initiatives, your industry is actively looking to provide an excellent product while also enhancing the lives of those who work for you.  This is not just the right thing to do; it is also good business. 

And -- thanks to the efforts of the Joint Apparel Association Forum (JAAF) and its "Garment's Without Guilt" campaign -- the positive image of the Sri Lankan apparel industry is beginning to be realized globally.

JAAF had a successful visit to Washington, DC earlier this year.  I have heard from various sources that the JAAF team impressed several Members of our U.S. Congress, among others.  The "Garments Without Guilt" campaign is vital to helping both the industry and the consumer differentiate between ethically-produced items and those that may have been made in sweatshop conditions by companies and governments who do not respect the rights of workers or of children. 

Unfortunately concern in the United States about the human rights situation in Sri Lanka has eclipsed the attention afforded to the “Garments without Guilt” campaign.  Given your industry’s influence and the stake you have in continued strong relations between the United States and Sri Lanka, I encourage the Apparel Exporters Association and its members to help find a positive resolution to these human rights concerns.

Another area where the U.S. and Sri Lankan apparel exporters have a common interest is in helping the Government and the residents of the East to effect a successful stabilization and development program in that strategically important part of your country. 

The government has developed a variety of generous incentive packages for companies who invest and start production in the East.  The President particularly highlighted "Nagenahira Udanaya" proposals in his presentation of the budget last week. 

One major priority in the East is job creation.  Some of your companies may already be considering expansion into the area.  You, as local experts, will know whether the conditions and incentives are appropriate for your business development.  I encourage you, if you determine the conditions are right, to do so. 

However, if hindrances to investment remain -- such as delays in getting goods out of the area by road due to checkpoints or uncertainty that employees will be able to travel freely and safely to and from work -- I also encourage you to speak with the government to highlight those obstacles because I believe there is a genuine desire on the part of the Government to create the right conditions for growth and development.  

A third area where you as exporters and we from the U.S. share an interest in doing more is in the area of intellectual property rights.  While the legislative framework for the protection of intellectual property is solid, penalties to deter copyright and trademark infringement should be enhanced. 

My staff recently met with the National police, who assured us that they are ready and willing to act upon complaints from those whose rights are being infringed upon.  I know some international U.S.-based brands have found success both in the courts and via settlements, but more needs to be done.  It is partially the burden and responsibility of the industry to help police itself.  I encourage you as an industry to speak up whenever you see a violation taking place, work with the Police to help them understand what problems they should be looking for, and to lodge complaints with the Police’s Commercial Crimes Unit.

Let me conclude by coming back to the theme I began my speech with, which is the future of Sri Lankan manufacturing.  While services and knowledge based industry will become an increasingly important part of Sri Lanka’s economy, I think the success of the apparel industry demonstrates the potential for a wider range of manufacturing to succeed in Sri Lanka. 

By hiring quality educated Sri Lankan workers, maintaining high labor and environmental standards, and a commitment to innovation and product excellence, other industries in areas such as footwear, rubber and coir based products and many others can emulate the apparel industry’s success. 

You the members of the Sri Lankan Apparel Exporters Association have achieved a lot for your industry and for your country.  I am confident your future remains bright. 

Thank you again for the honor of inviting me as your chief guest.