US believes SL is positioned at the optimal period to becoming a hub
Assistant US Trade Representative for South and Central Asian Affairs, Mark Linscott during a recent visit to Sri Lanka said that despite the new US administration, the US would not adopt an alternate trade policy towards Sri Lanka implying that economic ties between the two countries may improve considering the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) signed in Washington in 2002.
Linscott and the Economic and Commercial Officer of the US Embassy in Colombo, William Humnicky met with the Sri Lankan Secretary to the Ministry of Industry and Commerce, Chinthaka Lokuhetti; the Commerce Department Director General, Sonali Wijeratne; other Department of Commerce officials and the Senior Advisor to the Minister of Industry and Commerce, Himali Jinadasa.
“The new US administration has a significant shift in change towards several of its trade agreements, mainly the Trans-Pacific Partnership trade deal, and there is a big focus on renegotiating NAFTA as well as correcting our current trade deficits,” Linscott said.
“Despite this, I am not expecting any significant changes in the US’ bilateral trade with Sri Lanka or our Trade and Investment Framework Agreement with Sri Lanka. Being a hub in the region, this is a remarkably exciting time for Sri Lanka and we share the interest in working with Sri Lanka and exploiting its natural advantages for better trade. The WTO Information Technology Agreement and WTO Trade Facilitation Agreement will bring immediate international attention if Sri Lanka moves ahead while I agree that these are challenging initiatives for the country. Also we are pleased about the Government’s private-public partnership vision which TIFA too stresses about. The US is the largest export market for Sri Lanka but our exports to Sri Lanka have not increased in parallel and are down the list, something we need to work on,” he stated.
The US attributed to 27.5% of Sri Lanka’s 2016 total exports and US imports to Sri Lanka for the same year accounted for 2.77% of the country’s total imports from around the world. Data from the Department of Commerce of Sri Lanka indicates that of 2016’s bilateral trade activities, US imports to Sri Lanka were 16% amounting to USD 540 million, with Sri Lankan exports to the US making up 84% amounting to USD 2.8 billion.
Sri Lanka’s exports to the US surged by 33% from $ 2.11 billion in 2012 to $ 2.8 billion in 2016. In the same period, imports from the US to Sri Lanka surged by 130% to $ 540 million. Sri Lanka’s leading exports to the US in 2016 were apparel, clothing accessories and made up textile articles (all three totalling 11.5% of overall exports), solid, new and used tyres (6%), followed by fish, activated carbon and mineral, and cinnamon. Among the leading imports from the US in 2016 were oil cakes (13%), optical and photographic (10%), plastics (5%), medicaments (3%) and wheat and meslin (3%), etc.¹
“We welcome the recent US support by expanding the US’ GSP’s scope, which enhances our exports of travel goods to the US. Sri Lanka has one of the highest US GSP utilisation rates among other US GSP beneficiaries – we use 85%. Therefore it is time we see more new initiatives via TIFA and are keen to strengthen the TIFA path. Having successfully concluded the inter-sessional meeting in September 2016 at the 12th Joint Council Meeting (JCM) to adopt a five-year action plan, it is time to meet again,”Lokuhetti said.
“We are looking to move on from the past and create a special (trade) plan for Sri Lanka on TIFA. A real example is using trade to increase economic growth. We too definitely want to see TIFA’s follow-up on the progress achieved in Washington,” he added.
Data from the Department of Commerce of Sri Lanka indicates that bilateral trade between the two countries from 2012 to 2016 increased by 43% from USD 2.34 billion to USD 3.34 billion and 2016’s year-on-year bilateral trade with the US increased by 2.14% to USD 3.34 billion from 2015’s USD 3.27 billion.
Continuing trade relations between the US and Sri Lanka is a positive as the US being a consumer driven will continue to demand imports from Sri Lanka which is an export reliant nation.
|Article Code :||VBS/AT/22092017/Z_3|