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US
strips Lanka of garment cover The US is Sri Lanka's largest export market and the destination for US$ 1.8 billion ( Rs. 180 billion ) or as much as 38 per cent of exports, which are predominantly garments. Sri Lanka's garment industry is heavily dependent on the US with 63 per cent of all garment exports bound for the US. Minister Fernandopulle said the US had initially agreed to give Sri Lanka the same LDC (least developed countries) concessions, taking into consideration the effect last December's tsunami had on the country's economy. "But they have backtracked now and the chances are remote," he said. "We met officials from the US and have discussed the situation with them. We will be requesting the G-14 country ambassadors and the Sri Lanka ambassador in Washington to lobby for Sri Lanka," he added.Mr. Fernandopulle, representing Sri Lanka at the World Trade Organisation (WTO) ministerial conference here told The Sunday Times that Sri Lanka had now joined the G-14, which is a group of least developed countries (LDCs), to negotiate trade policies with the US. "Now it is called the G-14 + 1, because Sri Lanka has joined the group", he said. The main concern at present for Sri Lanka is to pressurise the US for duty-free access for its apparels,” he pointed out. According to a WTO Secretariat report on Sri Lanka's trade policies and practices, reforms have gradually shifted towards broad-based economic liberalization, but the US trade deficit with Sri Lanka was US$ 1.7 billion in 2003, an increase of US$ 14 million from 2002. Meanwhile, Sri Lankan delegates are doubtful of a deal at the WTO Ministerial Conference, which ends over the weekend, but said Sri Lanka will not be vulnerable in such a situation because of its more liberal trade policies compared to other developing economies. Dr.
Saman Kelegama, who was in Hong Kong representing the Sri Lankan
academia, told The Sunday Times that it was "highly unlikely"
that there would be a concrete deal, but Sri Lanka would not be
impacted badly. “Therefore, the WTO-based trade liberalisation does not have much impact and, as is the consensus among many developing nations, ‘no deal is better than a bad deal’,” he said. Sri Lanka stands out as one of the most liberal trade regimes in South Asia, with her main trade policy instrument being import tariffs. Dr. Kelegama said that during the past decade, market opening to manufactured imports was accompanied by internal deregulation and privatisation, while foreign direct investment played an important role in developing the clothing and tourism industries.He said that a stalemate in Hong Kong would prompt a further proliferation of bilateral and regional agreements between developing nations and LDCs, which was a threat to the WTO. Bilateral co-operation is an important element of Sri Lanka's foreign trade policy. Bilateral co-operation agreements have been signed with several countries such as China, India, Pakistan, Romania, Iran, Bangladesh, Egypt, Turkey, Kuwait and Cyprus. |
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