US and Sri Lanka step up FTA consultations
The United States and Sri Lanka are stepping up consultations and studies on the proposed Free Trade Agreement between the two countries with balance of trade currently in favour of the island nation, officials said.
The government hopes to gain a positive outcome from the preliminary work to go ahead with the proposed Sri Lanka -USA FTA, a senior official of the Ministry of Commerce and industry said.
The aim is to gain deeper trade integration and investment cooperation, access to markets and economical inputs and improved competitiveness in the US market, he disclosed.
According to the US Census Bureau, Sri Lanka’s total exports to US during the first three months of this year reached US$744.2 million while the country’s imports from US stood at $84.5 million. The balance of trade was $659.7 in favour of Sri Lanka. Sri Lanka is currently the 66th largest goods trading partner in the US with $3.2 billion in total (two way) goods trade during 2016. Imports to the US totaled $369 million while Sri Lankan exports totaled $2.8 billion with the trade deficit of $2.4 billion in 2016 in Sri Lanka’s favour.
Under this set up, with a view to significantly increasing two-way trade and investment between the US and Sri Lanka, the two governments have adopted a US-Sri Lanka Joint Action Plan to boost Trade and Investment. Bilateral trade and investment relationship between the two countries has great potential that can be realised through adoption of enabling policies and joint measures incorporated in the Plan, the Commerce and Industry Ministry official said. The Plan aims at reaching its goals over a span of five years. Its objectives include, among other measures: reforming Sri Lanka’s trade and investment regime to world class standards; improving the competitiveness of Sri Lanka’s current exports; developing new markets, especially those that take advantage of Sri Lanka’s status as a regional services hub.
It would also promote greater interaction between the US and Sri Lankan business communities; greater utilisation of US tariff preference arrangements while strengthening worker rights and promotion of ethical and environmentally sustainable manufacturing practices. The Plan is also aimed at reforming the educational sector to make it more responsive to the needs of business; and increased mobilisation of all sectors of society, especially women, in business and trade, he disclosed.
Meanwhile the Ministry of Development Strategies and International Trade has drafted a New Trade Policy (NTP) to govern and guide the administration in the conduct of international trade. In the backdrop of trade and investment being given the highest priority of the development agenda of the government, the NTP will set a framework to guide trade and FDI-led development in the country.
The NTP will assist in introducing domestic trade reforms and legal and regulatory structure required enhancing competitiveness leading to higher productivity, formulating the broad based fiscal policies which has cascading effects across many sectors and players in the economy, negotiating the international trade agreements, mapping out the product space and prioritising and boosting investments and exports and drawing up a facilitation mechanism to create a level playing field and adjustments, the Ministry official said.