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Sri Lanka set to pursue pro-western trade and foreign policy: Harsha

18 Nov 2015 - {{hitsCtrl.values.hits}}

Says country seeks stronger trade ties with US

By Chandeepa Wettasinghe
The country’s trade and foreign policy will be hugely pro-western going forward, according to the Deputy Foreign Minister who was speaking at the US Trade Show organized by the US Embassy and the American Chamber of Commerce at the Galadari Hotel yesterday.

“The government is seriously interested in plugging this country to the western world, so that we could create high paying jobs, and link both the rural and urban populations to the rest of the world,” Dr. Harsha de Silva said. He said that during his visit to the US last month, he had received a ‘fantastic reception’ indicating a significant shift in bilateral relations between the two countries for the better.

“The right time has now arrived for all of us to redouble our efforts to form stronger relationships and stronger trade relationship with the US,”
Dr. de Silva added.

He stressed that the existing free trade agreements (FTA) with Pakistan and India, while theoretically advantageous, have run into multiple problems.
However, the government intends to sign a Broader Economic Technology Partnership with India in mid-2016.

The recent FTA negotiations with China which have now been halted too had had concerns of para tariffs, non-tariff barriers and mutual standards similar to the cases of India and Pakistan.

Dr. de Silva said that since the Doha Rounds on liberalizing global trade has come to a standstill, Sri Lanka must form useful trade agreements with its biggest customers.

“We need to find friends who want to trade with us and do deals with those friends. Perhaps one can argue that it is not in the best interest of the world. But who cares about the best interests of the world? We care about the interests of our countries together,” he said.

He noted that the Trade and Investment Framework Agreement discussions with the US which were halted when the regime changed in 2004 have been restarted, and Sri Lanka has asked to be included in the Trans Pacific Partnership, but in a realistic note said that results would be a long way ahead.

Sri Lanka is also seeking to resume preferential access to the European Union with the GSP+ facility, which was revoked due to political reasons under the past regime.

The government’s western aligned policy seems to align with its export-driven policy, as of the country’s apparel exports, which formed 44 percent of the country’s total export revenue, or US$.4.7 billion, the US absorbed US$1.99 billion and the EU absorbed US$ 2.17 billion in 2014.

Out of the total exports for last year, the EU accounted for 31 percent and the US accounted for 24 percent.

“We like the Americans coming here and partnering with us, because it is still our largest buyer. It is not the days where politicians came up to the stage and said not to use Google and don’t drink Coca Cola. That era is gone. We welcome you to use Google and drink Coca Cola,” he said.

While the past regime had tilted towards China to the point of alienating the western powers, the new regime in January said that it would maintain a non-aligned status, possibly due to the amount of Chinese foreign direct investments and loans in the country.

Policy stability key to attract investments

US Ambassador to Sri Lanka Atul Keshap said that the world has seen tremendous business opportunities in Sri Lanka since the change of regime, but said that policy stability is crucial to finally attract foreign parties.

“The people of Sri Lanka have made clear their intent to leave aside the politics of the past in order to build a promising and unified future, and the government of Sri Lanka has brought in policies to make it easier to do business, operate here, and trade with Sri Lanka, not just for the US, but the rest of the world,” he said.

While noting that geographical positioning of Sri Lanka makes the country attractive for trans-shipment and assembling operations, he said that the political change observed is even a bigger boon.

“It is clear to me that there is a new and tremendous opportunity for business ties between Sri Lanka and the US. I believe we can do a lot together to enhance the economic relationship and expand our bilateral trade.

However, he said that US companies tend to set up business in countries which have safe, stable and transparent regulatory and policy environments.
“Representatives of US companies have told me that they would like to see more economic policy consistency, a more fiscally stable government, and sustainable and more transparent policies,” he said.

Keshap said that he hoped the government and business communities in Sri Lanka work together to achieve these goals.

Business Main

Sri Lanka set to pursue pro-western trade and foreign policy: Harsha

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