The US ambassador for Sri Lanka told garment exporters on Friday (28 March) that the current slowdown of the US economy will not drastically hurt Sri Lankan garment exports into the US.

Ambassador Robert Blake said that impacts of the slower US economy would be relatively mild. 

"The OECD and many economic experts expect any downturn to be relatively mild and probably short-lived," said Blake, speaking at the Garment Buying Offices Association's AGM, on Friday.

"I think you will find that US consumers will not stop buying goods from Sri Lanka. The economy would have to get a lot worse to really stop American shoppers from going to the Gap or Victoria's Secret," he said.

However, the US ambassador warned the Sri Lankan garment industry to prepare to face increased competition from China, starting next year.

"Safeguards, which now cap certain Chinese garment exports to the US, are scheduled to expire at the end of 2008. This will mean opportunities for US buyers to source more garments from China, perhaps at the expense of Sri Lanka," said the ambassador.

He said that other countries are asking for restrictions on Chinese exports to be extended - but said that this was unlikely.

"In all likelihood, Sri Lankan garment producers will increasingly need to compete head to head with Chinese producers," said the ambassador.

The US is the single largest buyer of Sri Lankan ready-made garments, buying up slightly over half of the country's total production.

By Dilshani Samaraweera.