The Memorandum of Understanding between Sri Lanka and the EU signed December 5, 2000 will suspend apparel quota restraints on all four apparel quota categories which were under restraint to EU countries.

With the suspension of quota restraints on these four quota categories all apparel exports from Sri Lanka to the EU will now be totally quota free.

The dropping of the import quotas looks promising for Sri Lanka's apparel export industry, which currently exports 34 per cent of its total apparel exports to the EU.

This has also been bolstered with the news that several major retailers, which are currently sourcing from Sri Lanka, are expected to double their sourcing requirements with the news of the removal of the quotas.