Deputy Minister of Finance, Sarath Amunugama, warned this week of an impending “slew of protectionism” in the US, as the recession in the US drags on. Sri Lanka will be affected by increasing protectionism in the US, if it stifles exports of Sri Lankan goods and services. The US is Sri Lanka’s single largest trading partner accounting for about one third of total Sri Lankan exports and is the single largest buyer of Sri Lanka’s biggest export item, garments.
“There will be a slew of protectionism in the US. It is coming. We have to look at these patterns and prepare to face the outcomes,” said the Minister speaking at a conference organised by the Institute of Policy Studies on the World Bank’s latest World Development Report findings.
With traditional western export markets such as the US, shrinking due to recession, larger developing countries such as China have decided to increase domestic consumption, to prevent their economies from slowing down too fast.
“China has production centres to produce goods cheaply, to export to the west. But these export markets are now narrowing. So they have decided to increase domestic consumption and to make the Chinese peasants more consumption oriented, to absorb some of this output,” said the Minister.
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