The British Retail Consortium has warned that a threat to remove special tax-free arrangements for cheap, good-quality clothes imported from Sri Lanka could hit flourishing businesses and jobs in the country and put up customer prices, reported the UK website, retail-week.com.

Sri Lanka has until Thursday to deliver to Brussels its response to charges of human rights abuses during the country’s civil war earlier this year. If human rights complaints are upheld by a Commission investigation, Sri Lanka could lose its special trade access to EU markets, the report stated.

The website said that Alastair Gray of the British Retail Consortium had said that whatever the human rights concerns, any response has to be balanced. Otherwise, if the preferential access deal is withdrawn by the Commission, business in Sri Lanka could close. “Sri Lanka has many very good textile factories, but profit margins are small, and if they lose their current import arrangements, there are textiles manufacturers in Bangladesh, Vietnam, and Thailand who will be ready to compete hard.

The report added that an estimated 250,000 workers employed in textile factories could lose their jobs with manufacturers forced to move or increase wholesale rates, leading to price increase of possibly 10% on popular Sri Lankan-made clothes in UK shops including Next and Marks & Spencer.

The report further stated that a European Commission spokesman had said that Questions remain over the degree of effective implementation of certain UN human rights conventions in the country.