June 30, Colombo: The US has expressed willingness to offer their cooperation in providing technical assistance for capacity building and skill development in several areas to improve bilateral trade during trade talks held recently between the U.S. and Sri Lanka.
The 13th Joint Council Meeting (JCM) under the USA-Sri Lanka Trade and Investment Framework Agreement (TIFA) took place on 19th and 20th June at Hotel Hilton, Colombo with the presence of a team of senior officials from the United States and a wide cross-section of Sri Lankan officials and private sector stakeholders.
Malik Samarawickrama, Minister of Development Strategies & International Trade (MODSIT) inaugurated the meeting, while S. T. Kodikara, Secretary to the MODSIT delivered the welcome address. The TIFA session at the technical level was co-chaired by Nimal Karunatilake, Actg. Director General of Commerce and Christopher Wilson, Assistant United States Trade Representative for South and Central Asia.
The two delegations engaged in a closer dialogue, covering a range of subject matters that are of mutual interest. The discussions, inter-alia, focused on areas such as market access, trade and investment policy reforms of Sri Lanka, trade facilitation, intellectual property rights, development and innovation in the digital economy, government procurement, environment and trade capacity building.
Following detailed deliberations, the US side expressed willingness to offer their cooperation in providing technical assistance for capacity building and skill development in several areas, including improvement of Sri Lanka's ranking in the "Ease of Doing Business Index", digital economy sector development, Sri Lanka's compliance with the WTO Trade Facilitation Agreement, economic empowerment of women and upgrading and supporting SMEs in certain selected sectors, establishment of a one-stop service center and enabling environment for micro, small and medium enterprises (MSMEs), technology transfer in intellectual property rights and start-ups in technology driven companies.
Accounting for over 12% of Sri Lanka's total external trade, the USA continues to remain the largest single trading partner of the island. With the two-way trade amounting to US$ 3,729 million, the year 2018 saw the highest-ever value of bilateral trade between the two countries.
The USA also ranks the largest single export destination for Sri Lanka and it absorbs over 25% of Sri Lanka's total exports. The value of Sri Lankan exports to the USA, which stood at US$ 3,083 million in 2018, is the highest recorded in their trading history. Apparel products account for as much as 70 % of total exports, while the rest of the products include solid tires, pneumatic rubber tires, rubber gloves, retreaded or used pneumatic rubber tires, articles of vulcanized rubber, tea, fisheries products, cinnamon, activated carbon, precious stones etc.
Sri Lanka has imported about US$ 645 million worth of goods from the US in 2018 and high-value items like aircrafts & space crafts, turbo-jets, turbo-propellers and other gas turbines, medical instruments and appliances etc. feature among the key products.
Sri Lanka is one of the beneficiaries of the United States' GSP Programme, the largest and oldest preferential scheme of the USA. In 2018, Sri Lanka's rate of GSP utilization stood around 86%, which was much higher than the global average of 70%.
The USA ranks the 10th largest foreign investor in Sri Lanka and the cumulative value of its investments in the country between 2005 and 2018 stands closer to US$ 457 million. Manufacturing, apparel, hub operations, services, IT & software development, tourism & leisure, agriculture and utilities are some of the key sectors of US investment. The US-Sri Lanka bilateral investment treaty, agreement on avoidance of double taxation, the TIFA process etc., have had a salutary impact in in facilitating US investments in the island.
The TIFA, which was signed on 25 July 2002 has strongly affirmed in Article (4) of the Framework Agreement that both USA and Sri Lanka "agree to initiate consultations on areas of co-operation that may be agreed by the Joint Council to liberalize trade and investment". Accordingly, during the successive Joint Council Meetings under the TIFA, a major focus lies in obtaining a tangible direction in realizing the fuller potential of bilateral trade and investment relations between Sri Lanka and the United States.