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Sri Lankan experts call for more attention to global trade to fuel Economic Growth

 Sri Lanka  |    

2024/03/07 17:02 pm

The negotiation team for the Sri Lanka-Thailand Free Trade Association (SLTFTA) and experts from the industry have recently talked about this FTA and its effect on Sri Lanka's economic development during a seminar held by The Ceylon Chamber of Commerce.

Duminda Hulangamuwa, Chairman of the Ceylon Chamber, while stressing the importance of addressing the challenges of global market competition, said it was important that Sri Lanka needs to explore and leverage agreements strategically to be competitive with nations like Vietnam, Thailand, Malaysia, China, and Singapore.

He said that long-term global trade growth could bring about the country experiencing an 8 to 9 percent rate of economic growth and that the country cannot depend on 2 or 3-percent growth.

Chief Negotiator K J Weerasinghe, on his part, stressed the importance of aligning with the government's goals to open markets globally and attract investment.

The president outlined a three-pillar approach focused on preserving and promoting existing trade agreements with the US as well as the European Union, expanding market access in South Asia with countries like Bangladesh, Pakistan, China, and India as well as increasing the market's access to East Asia with Thailand, Malaysia and Singapore.

He acknowledged it was true that Sri Lanka lost opportunities on the trade side over the last five years and stressed the need for Sri Lanka to move quickly to make the most of future opportunities.

Similarities to Sri Lanka's Free Trade Agreements with Thailand and Singapore, Renuka Weerakoon, DG, BOI and Head of the Investment Chapter, highlighted the extensiveness of these FTAs that cover such areas as trade facilitation, services processes, Sanitary and PhytoSanitary (SPS) technical barriers to trade (TBT) and trade remedies, investment as well as intellectual property.

She also stressed the importance of FTAs to Sri Lanka, given its smaller market in the country and the potential for an increase in market access as well as Foreign Direct Investment (FDI), jobs as well as foreign exchange, technological transfer, innovation, as well as international networks for trade. She also highlighted the possibility of higher Thai investment in services and manufacturing under the recently concluded SLTFTA.

Deshal de Mel, Advisor, Ministry of Finance and Director of Trade in Services Chapter, stressed that SLTFTA can be seen as part of a wider strategy for driving qualitative shifts in the growth of Sri Lanka's economy. He stressed the importance of FTAs as part of the strategy for economic recovery and stressed the necessity for Sri Lanka to integrate into the regional and global value chains.

He pointed out that the non-tradable industry has led to the growth of Sri Lanka's economy and, as the country progresses Sri Lanka needs to develop non-debt-generating opportunities and diversify its exports to other products than traditional.

He also noted that FTAs allow for open access to regional value chains of trade and offer the chance to take part in regional trade deals that boost long-term economic prosperity. He emphasized that economic growth in the long run is driven by productivity which is ultimately determined by the competitiveness on the global market.

"Dr. Asanka Wijesinghe, Research Fellow at the Institute of Policy Studies (IPS) has highlighted research findings from IPS which show an increase in exports due to Sri Lanka-Thailand FTA Sri Lanka Thailand FTA could boost Sri Lanka's exports by 38%.
by removing tariffs.

He stressed that Sri Lanka must focus on manufacturing, clothing, rubber products, and food products covered by FTAs since these areas are subject to very high tariffs in Thailand providing significant export opportunities. He said that FTAs could be an effective tool for Sri Lanka to engage in targeted liberalization and seek expansion through special trade agreements with countries, like an agreement with the EU for electronic vehicle components. EU for electronic components for manufacturing vehicles.

Source: Lanka Business Online Edited version.

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