21 September, 2018

Blog

Asking For ‘More’ Market Access From US

By Malik Samarawickrama

Malik Samarawickrama

Malik Samarawickrama

The US is Sri Lanka’s largest export market. Let me know say that like Oliver Twist, the main theme of my remarks today is going to be about asking for ‘more’ market access.

It is a great pleasure to be here with you at the 12th Joint Council Meeting under the US-Sri Lanka Trade and Investment Framework Agreement.

Let me also express my sincere gratitude to Ambassador Michael Froman and Ambassador Samantha Power for their participation in these sessions. We greatly appreciate the trouble taken to be here personally despite the many competing claims on their time.

As is well known, our countries have had very productive bilateral relations over seven decades. The US continues to be Sri Lanka’s largest export market. The importance of this should not be underestimated for a country like Sri Lanka, which is small and highly trade dependent for promoting growth and shared prosperity.

Our bilateral relations have been multifaceted and have covered a range of activities.

The US is Sri Lanka’s largest export market. Let me know say that like Oliver Twist, the main theme of my remarks today is going to be about asking for ‘more’ market access.

Increased market access for Sri Lankan exports will be crucial for building a more prosperous, stable and peaceful Sri Lanka.

I hope our deliberations today will yield concrete outcomes, which give our exports increased access to the US market. This will also enable us to leverage the trade-investment nexus to attract much needed FDI flows.

I hope you will bear with me for a while as I seek to elaborate upon the case for using these talks to generate concrete outcomes which will give a rapid boost to Sri Lanka’s efforts to increase exports and FDI, the two key pillars of our private sector oriented development strategy.

As you are aware, major changes have been underway since the dramatic, peaceful and people-led political transition, which took place on 8th January, 2015.

The present Unity Government provides a cooperative framework for long overdue reforms.

A Constitutional Council has been appointed, which has established eight independent Commissions that are now functioning. The powers and capacity of the legislature are being increased with greater parliamentary scrutiny through Oversight Committees and the Parliamentary Budget Office; the independence of the judiciary is being reaffirmed; there is a free and vibrant press and media; and bribery and corruption are being combated based on the UN Convention against Corruption.

Our government has also initiated a process of constitutional reform, which includes nation-wide consultations. We are also in the process of putting in place a four-pronged approach to reconciliation and accountability to promote the healing process after the end of the conflict.

All this serves to revitalize Sri Lanka’s democratic credentials; improve governance; and strengthen the role of law. These are key elements of the platform, which brought our government into power. It is encouraging that progress is being made on these fronts. There are those who would want us to move faster. However, given the compulsions of coalition politics and the capacity constraints found in any developing country, I am firmly of the view that the direction is positive. We are making steady progress and we will continue to do so.

While all this is encouraging, the primary concern of the vast majority of our people is their material wellbeing. In their eyes, the dividends they expect from the 8th January, 2015 political transition is not confined to the gains I have just catalogued. They are also interested in a sustainable economic dividend. In fact, they are becoming impatient for it.
Here, the challenges are considerable. We inherited a legacy of unsustainable fiscal deficits and fragile debt dynamics. These constitute a very negative overhang on the country’s economic prospects.

In addition, global economic conditions have become more uncertain and difficult. The combined effects of a shift in the US Federal Reserve’s interest rate cycle; the uncertainty caused by the rebalancing of the Chinese economy; continued sluggish growth in Europe and Japan; the net outflow of funds from emerging markets; the elevated risks associated with Brexit and weak commodity prices have had an negative impact on many developing countries. Sri Lanka is no exception.

At this difficult time when global growth is being downgraded and international trade is sluggish, we are having to ask our people to tighten their belts to achieve fiscal consolidation, external account stability and increased external reserves, as well as to contain inflation.

As a lower-middle-income country, Sri Lanka has an expanding middle-class, which is impatient for an improvement in the living standards of their families.

It is in this context that our government is seeking to stabilize the economy and implement a development strategy that is capable of giving our people sustained accelerated growth and a million jobs in the next 5 years. We are determined to break out of the cycle of stop-go policies, which have characterized our past. For this, we need to create a sustainable growth framework.

In response to these challenges, we are putting in place a stabilization program, which will strengthen our macroeconomic fundamentals. We are confident that the IMF will support our efforts through an Extended Fund Facility. This will serve to attract other multilateral and bilateral support; as well as boost sentiment when we go to the international capital markets.

We have initiated a number of measures to improve the investment climate and strengthen trade facilitation.

The new government is committed to improving the overall investment environment in Sri Lanka to attract more foreign direct investment to the country. For this purpose, a number of initiatives have been put into operation.

The government has taken the initiative to establish an Agency for Development and an Agency for International Trade, in order to establish better coordination among government Agencies, Corporations and Departments, in order to expedite decision making.

The investment-trade nexus is being promoted by initiating a number of Free Trade Agreements (FTA) and Economic Partnership Agreements. The government will finalize an Economic and Technology Cooperation Agreement (ECTA) with India by the end of 2016 where the economic relations with India would be broadened by liberalization of services and investment between the two countries and deepened with further liberalization of goods trade now mostly governed by a FTA between the two countries. An FTA with China will come into effect by early 2017. With these two Agreements in place, Sri Lanka will be the second country in Asia after Singapore to have duty free market access to the two Asian giants. The government also plans to finalize Trade Agreements with Japan, Singapore and Turkey within the next 12 months.

The Cabinet of Ministers has approved the ratification of the WTO Trade Facilitation Agreement. This will be lodged formally at the WTO shortly.

I should also add that there are a number of major area development programs in the pipeline, which will transform the Sri Lankan economy.

The Western Region Megapolis Plan (WRMP), as well as the Hambantota, Jaffna, Kandy, Galle and Trincomalee District development programs will have a transformative impact on the lives of many Sri Lankans. We are working with the Chinese, Indians, Japanese, Singaporeans and the South Koreans to implement these programs, which will have a large equity component.

This will create opportunities for investors from all over the world, including the US.

I believe there is a strong case for being optimistic about the medium and long-term prospects of the Sri Lankan economy. However, a number of the projects and programs that are in the pipeline will have gestation periods of a few years.

It is important, therefore, to explore quick wins that can have an impact in the short-term. Here, I believe the US can be very helpful.

Our government greatly appreciates the support we have received from the US authorities.

Sri Lanka has been encouraged by the visit of US State Secretary Hon. John Kerry to Sri Lanka and other high level visits and the words of support received from the President of the United States and several members of the United States Congress as well. The first ever “Partnership Dialogue” held between the two countries last month signals the excellence in bilateral relations and high level of convergence between the United States and Sri Lanka in all aspects and in particular, support of the United States for peace building and political reform.

We also appreciate the fact that USAID is ramping up its operations in Sri Lanka. Its proposed programme to support the BOI is a very welcome development. In addition, the Millennium Challenge Corporation is working with us to explore the possibility of Sri Lanka becoming a ‘Compact’ country, which will open up significant amounts of grant financing.

I also hope USAID will give favourable consideration to our request for assistance for the Agency for Development, which will play an important role in coordinating and implementing the government’s priorities, policies and programmes.

However, the ‘Jewel in the Crown’, would be significantly increased preferential market access as this has the capacity to generate ‘quick wins.’ I would like to reiterate that we need to manage the short-term.

Sri Lankan exporters know how to operate in the US market. They would have the capacity to respond quickly to greater market access. In contrast, our initiatives to increase market access in China, India, Singapore, Turkey, etc., will have longer lead times before they yield benefits.

Let me now set out how I believe the US can assist us to achieve some ‘quick wins’.

The US already has special programs, such as the Qualifying Industrial Zones; the Special Programs for Haiti; the Africa Growth and Opportunity Act, as well as the Special Programs for the Caribbean and Andean countries.

Ambassador Froman, may I request your office, together with the State Department, to work with the US Congress towards establishing a similar program: a preferential trade programme for promoting reconciliation and consolidating democracy through trade in Sri Lanka.

While a special trade preference program is our immediate priority, we would also like to explore with you the development of a process, which would make it realistic for Sri Lanka to consider TPP membership further down the line. In my view, establishing a joint Working Group to examine the implications of TPP for Sri Lanka would be a good first step.

Sri Lanka has a negligible presence in global value chain. We are seeking assistance to improve the competitiveness of domestic enterprises to enable them to become part of global and regional production sharing arrangements.

While opening up the economy, our government is also seeking assistance to build capacity in trade policy enforcement to ensure that Sri Lankan producers and workers have a level playing field to compete in an increasingly outward looking economy.

Our government is attaching high priority to upgrading SMEs to enable them to participate in international trade as an important means of promoting inclusive development. In this connection, there seems to be merit in establishing a US-Sri Lanka Partnership for access to credit through which USAID, in partnership with local banks, can make credit available for SMEs.

May I also suggest that we consider how we can work together in the area of tertiary education, training and skills development. Our government is attaching high priority to empowering our people to take advantage of opportunities that would arise in an increasingly competitive and rapidly modernizing economy.

Digitalization is also receiving close attention across government. The US is clearly very well positioned to support a national strategy for delivering basic services, improving citizens’ life styles and promoting e-commerce.

Our agenda today also includes a number of other items. Many of them came up during last month’s ‘Partnership Dialogue’. I hope we can get favourable outcomes in these areas as well. Our Mission in Washington will follow-up with the relevant authorities. As our government continues with its private sector-led development strategy, it will become even more important for the business associations in our two countries to establish closer links. In this connection, it would be useful to set up a US-Sri Lanka working group within the US Chamber of Commerce.

Before I conclude, I would like to raise another avenue, which we would like to pursue vigorously, Sri Lanka has just ratified the Paris Declaration. This opens up opportunities under COP 21. We would like to see how best we can take advantage of these alongside facilities available through OPIC.

Finally, Sri Lanka is on the cusp of a transformative leap forward. However, there is much to be done and we require the goodwill and assistance of our friends like the USA. We look forward to working very closely with you Ambassador Froman, and your office, Ambassador Samantha Power, the State Department, USAID and other US government agencies as well as Congress as we pursue our reform-oriented goals.

*STATEMENT BY MALIK SAMARAWICKRAMA, MINISTER OF DEVELOPMENT STRATEGIES & INTERNATIONAL TRADE – 12TH JOINT COUNCIL MEETING UNDER THE US-SRI LANKA TRADE AND INVESTMENT FRAMEWORK AGREEMENT – 28 April, 2016

Print Friendly, PDF & Email

Latest comments

  • 4
    0

    We should broaden our perspective. We should not let down any country as a developing country which is hoping to be the emerging wonder of Asia.

  • 6
    3

    This shows the amateurish nature of this guy. US did not give a single cent to SL. There is nothing holding up access to US markets other than the capacity of our small companies. They also have to be mindful because if they make too much profits Gallion Ravi will bring in one off Super Gain taxes to strip them of their profits. Malik has just joined Dress Designer Mangala’s NATO club.

  • 5
    4

    This shows the power that the US has over other nations. Stop trading and we perish. It is infantile to think that Lanka can survive in this world without taking into account the Western powers. To do this we need wise leaders, but who have we got? A bunch of self-seeking morons.

  • 3
    0

    No mention of the growing Chinese influence – Port City & the new Hambantota projects.
    Australia has blocked massive land sale to the Chinese, in the ‘national interest’.

    http://abcnews.go.com/International/wireStory/australia-blocks-284-million-ranch-sale-chinese-38752103

  • 3
    0

    Hilmy Cader’s idea about SL joining supply chains in the South/East Asian region makes better sense I think. Do our graft ridden business leaders have what it takes to compete in a market where you can’t bribe ministers? He is trying different things so that’s encouraging yet it says a lot when we keep asking for a preferential treatment for our goods as we are unable to compete otherwise.

  • 1
    1

    Australia has blocked land sales a little too late in that they have closed the stable doors after horses have bolted away.
    China has enough investments in Australia to sustain their economy or crash it.

    Are we only trying to dwelve on garment exports to survive and to cure all ills. Malik only knows the Garment trade and he is attempting to capitalise for himself with more export quotas to USA.
    Is malik attempting hoodwink the people & strengthen his position?
    He already has interest in China for manufacture.

    malik should open a garment factory in Thondamannar and then ask the USA for more quota and access into the USA. He might stand a chance.

  • 0
    1

    “Jewel in the Crown”! (alarm bells): We hope this is about Sri Lanka’s Crown Jewel, in exclusive trading with the US empire. We hope it is not a code word for any Indian-land-bridge-Sri-Lanka empire.

  • 2
    0

    ”(SouthSriLanka) Asking For ‘More’ Market Access From US”:
    North/East Sri Lanka want to access school administration of the military:

    ”Approximately 270 pre-schools in the Mullaitivu and Kilinochchi districts remain under the Civil Security Department, which also provides 512 pre-school teachers. A total of 9422 children are reported to be studying in those pre-schools in both districts.
    Despite calls for the schools to handed back to civilian administrators the Civil Security Department remains in control, a role that the CSD states will continue in the future” – tamilguardian.com

    The Army, Navy and CSD are all involved in various economic activities in the North and to a less extent in the East(and much less in the rest of the country) and the highly unemployed and underemployed people of the North would like to have ”access” to them(the economic activities).

    Successive governments have been treating the North and the East socio-economically (AND politically) differently(separately?) from the South. They ”have not been violating” the Sixth Amendment.

  • 0
    0

    Pragmatic man.

  • 1
    1

    A fantastic presentation Malik and being a renowned businessman with loads of experience you know your onions.Malik, Ranil has handpicked you knowing your ability and the nation is confident you will deliever the goods.
    The ball is now in the US court and being aware of the transformation Sri Lanka can feel assured that they will come to our assistance.Thanks to the US purchasing our garments through the years our foreign exchange reserves have kept afloat.
    The US is morally duty bound to help Sri Lanka at this juncture by boosting investements,exports from Sri Lanka and also tourism.The mere fact that President maithripla Senanayake has been invited to the the G7 summit is an indication that Sri Lanka is being recognised as a safe place for investments.
    As a Sri Lankan I appeal to the US to multiply their investments in SL and help us recover from the economic indebtedness that the present government inherited.Considering the beautiful Democratic process that prevailed in bringing this National Govt into play purely by the will of the people I feel confident the US will respond positively.There is an urgency in respect of our need so its upto the our Embassy in the US to accelerate the proces.
    A good start Malik.

  • 0
    0

    Malik Samarwickram has to study WTO trade manual.

    Malik is lack of political -economic knowledge of the proposed US coloinilaztion new economic venture run by Multi-National Corporation US Market and Trading being survival since 1944.
    That is called Old World Order led by US, EU and Japan base system of market economy for Rich nations.

    Even US Federal Reserved Bank is run by private venture Capital is not known to public may be even to Mailk.S…. himself.

    In this case that US Embassy in Colombo has no access to US huge market as well as no access to MNC in US .Malik has aware this fact by himself. He has come out with more reading US market economy.

    I too support for US market access is good move.
    But failure to learn lesson of new trend of Economic by Milak that reforms of market trading and capital funding achieve very hard to be accomplished in USA by Sri lank new rulers led by UNP -Ranil W…of “good governances.”

    Most of US funding concentration in the hand of by and large Wall Street Marketing and Investment decision taken by hedges funding entrepreneur of day to day excess capacity profit on levy.
    Indeed Unfortunaly US hedging funds no Ethical code or respect free trade evaluation on WTO rules by giant Companies of MNC of USA.

    They do not respect and accepts the an equalisation principle trading investment and development of sustsnibility of capitalism in developing economies country like Sri lanaka

    Following matters has lessons learn by Mialk;
    1 Fitch rating
    2 The IMF funding
    3 Balance of payment risky for country Like Sri lank since last 16 months; which not cater for is our sustainability economic and financial commitments from UNP leadership long-standing economy gains?

    Specially, that needless to say you talk on huge debt of country of past Govt. do you know that is lost your own credibility of catering to world market, and investors even USA market.

    Most of your policies are short sighted ,every investors are NOT taken UNP political manual darted by Ranil w…before they invested in our Island.

    Think to change, set of mind into national policies not to suited to US market only to accommodated to other markets as well.

    That days has dead and gone New capital Market has been Emerge. Survival of your economic policies is survival of our nation not only UNP!

Leave A Comment

Comments should not exceed 300 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically shut off on articles after 10 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.