The US has stressed that there shall be no major change in its trade policy towards Sri Lanka in the aftermath of its new administration -and hinted on stronger economic relations in future based on the bedrock US-Sri Lanka Trade & Investment Framework Agreement (TIFA) inked in Washington in 2002, to which Colombo consented readily on 18 September.
“It is tough to predict the future” stressed the Washington DC based visiting new Assistant US Trade Representative South and Central Asian Affairs Office of the US Trade Representative Mr Mark Linscott on 18 September in Colombo. Assistant US Trade Representative Linscott was meeting Sri Lankan Ministry of Industry and Commerce Team led by Secretary of Ministry of Industry and Commerce Chinthaka Lokuhetti representing Minister of Industry and Commerce Rishad Bathiudeen, joined by Commerce Department Director General Sonali Wijeratne and other DoC officials and Minister Bathiudeen’s Senior Advisor Himali Jinadasa. Assistant US Trade Representative Linscott was joined by Economic and Commercial Officer of US Embassy in Colombo Mr William Humnicky.
“It is tough to predict the future. 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 re-negotiating NAFTA as well as correcting our current trade deficits too” said Assistant US Trade Representative Linscott, and added: “Despite this I am not expecting any significant changes in US’ bilateral trade with Sri Lanka or our Trade and Investment Framework Agreement (TIFA) 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. WTO Information Technology Agreement (ITA) and WTO Trade Facilitation Agreement (TFA) would bring immediate international attention if Sri Lanka moves ahead while I agree that these are challenging initiatives for the country. Also we are pleased of the government’s Private Public Partnership vision which TIFA too stresses about. US is the largest export market for Sri Lanka but our exports to Sri Lanka have not increased in parallel and is down the list, something we need to work on!”
When it comes to Sri Lanka’s trade with the world in 2016, 27.5% of total Lankan annual exports headed to US while 2.77% of total imports from the world to Sri Lanka were from the US. According to the Department of Commerce of Sri Lanka, of last year’s Sri Lanka-US total bilateral trade, only 16% were imports to Sri Lanka ($ 540 Mn) while 84% were exports from Sri Lanka to US (at $ 2.8 Billion). In the five period of 2012-’16, Sri Lanka’s exports to US surged by 33% from US $ 2.11 Bn (in 2012) to $2.8 Bn (in 2016). In the same period, imports from US to Sri Lanka surged by 130% to US $ 540 Mn. Sri Lanka’s leading exports to US in 2016 were “apparels” and “clothing accessories” and “made up textile articles” (all three totalling to 11.5% of overall exports), solid, new and used tyres (6%) followed by fish, activated carbon & mineral, and cinnamon, Among leading imports from US in 2016 were oil cakes (13%), optical and photographic (10%), plastics (5%), medicaments (3%), and wheat and meslin (3%) etc.
Sri Lankan officials apprised the Assistant US Trade Representative Linscott on the country’s many new trade initiatives based on the vision of the Unity Government of Sri Lanka and thanked for recent US-GSP support. “We welcome the recent US support by expanding US GSP’s scope which enhances our exports of travel goods to US” said Secretary Lokuhetti and added: “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 on 12th Joint Council Meeting (JCM) to adopt a five-year action plan, it is time to meet again.”
US Trade Representative Linscott responded: “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. I appreciate this frank exchange of ideas with the Ministry of Industry and Commerce in my first visit to Sri Lanka.”
The US-Sri Lanka Trade & Investment Framework Agreement (TIFA) was signed in July 2002 in Washington D.C., to further enhance trade and economic relations between the two countries.
According to the Department of Commerce of Sri Lanka, in the five period of 2012-’16, Sri Lanka’s bilateral trade with US surged by 43% from US $ 2.34 Bn to $3.34 Bn. Even last year, Sri Lanka’s YoY bilateral trade with US surged by 2.14% to US $ 3.34 Bn from 2015’s $3.27 Bn.