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| Thursday, 20 January 2005 |
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Zero duty for Lankan exports to US, EU vital - Jeyaraj Fernandopulle Trade and Commerce Minister Jeyaraj Fernandopulle has emphasized the need to ensure immediate special market access involving zero duty for Sri Lanka's exports to the USA and European Union trading partners. The Minister who met a high-powered delegation from the US and the EU here recently said that the two trading partners' support was vital for Sri Lanka to compete in the international market especially at a time when the country is facing an unprecedented socio-economic crisis with the cost of damage by the recent tsunami estimated at a preliminary US $ 1.5 Billion. Among the members of the delegation the Minister met were his counterpart in the US Robert B. Zoellick, United States Trade Representatives Ms. Josette Shiner and Peter Mandelson, Commissioner for Trade, European Commission. The Minister said that the colossal impact of this disaster on the Sri Lankan economy has most unfortunately coincided with the abolition of quotas for textiles and clothing. "Sri Lanka which had hitherto enjoyed an assured share of the quota now faces fresh threats by the predominance of other large suppliers. Moreover, the problem of facing a quota free market for the apparel sector in Sri Lanka is increasingly compounded by the various special preferential arrangements and duty free status enjoyed by its competitors in the major markets of the USA and EU," the Minister said.The Director General of Commerce K.J. Weerasinghe said that the request for duty free market access and special market incentives from the USA and EU has been made conforming to international trade rules of the World Trade Organisation and existing mechanisms in bilateral trade relations. "In fact the Director General of the WTO recently endorsed publicly the need for providing special market access to tsunami affected countries. Sri Lanka's duty free access is sought primarily for textile and clothing exports, being the major item of interest as well as other exports to the markets of EU and USA," Weerasinghe said. He said the duty free/quota free treatment accorded under special bilateral incentive arrangements often fail to deliver tangible results owing to the rigid and inflexible rules of origin requiring high value added criteria, double transformation and use of preference giving the country's inputs. "Therefore it has been proposed that any bilateral duty free treatment requested provisionally for Sri Lanka's exports to the USA/EC should be accorded flexible rules of origin in keeping with the country's level of backward integration in industrial manufacture," he said The USA is the largest export market for Sri Lanka's apparel accounting for 62% of all our apparel exports i.e. US$ 1.5 billion worth per year. The USA is also the largest export market for Sri Lanka accounting for 38% of our exports. The EU is the second largest market for Sri Lanka's apparel products accounting for more than 50% of our exports of apparel and is the largest trading partner of Sri Lanka in terms of imports 16% and exports 30%. The United States continues to remain Sri Lanka’s major trading partner, accounting for approximately 36 percent of Sri Lanka’s exports and 3 percent of its imports. Sri Lanka’s export and import trade figures for the last seven years are given in the table below. Total Trade - Value Rs. Million Year Imports Exports Total Trade Balance of Trade 1997 11,009.33 98,237.17 109,246.50 87,227.87 1998 14,824.60 121,997.99 136,822.59 107,173.38 1999 15,222.15 126,024.07 141,246.22 110,801.92 2000 19,316.40 165,755.20 185,071.60 146,438.80 2001 23,730.00 171,794.90 195,524.90 148,064.90 2002 20,905.90 168,595.90 168,501.80 147,690.00 2003 19,144.1 171,233.6 190,377.7 152,089.5 Source: Sri Lanka Customs |
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