Apparel has the biggest potential to increase exports to UK markets, according to a latest report on ‘Sri Lanka-British trade activities. Bilateral relationship between the UK and Sri Lanka has grown over the last two decades, with average bilateral trade volumes in the last ten years topping US$ 1.4 billion and the trade balance has been in favor of Sri Lanka. Apparel is the top export item to the UK; in 2018, and three fourths of the island’s exports to the UK.
Sri Lanka’s main imports from the UK include high quality British machinery, equipment, automobiles and food products. The report launched in Colombo on Friday notes that there are further opportunities in FMCG, pharmaceutical and technology services.
Minister of Development Strategies and International Trade, Malik Samarawickrama said, apparel exports are an area for building on and strengthening the linkages between British retailers and brands, and Sri Lankan manufacturers.
He was speaking at the launch of Sri Lanka - United Kingdom Bilateral Trade and Investment report at the Ceylon Chamber of Commerce.
Sri Lanka’s government was keen on some preferential trade arrangement with the UK, following Britain’s exit from the EU, ideally the continuation of GSP Plus equivalent benefits, and leading towards an FTA in the future. “Sri Lanka can offer ethically manufactured, environmentally responsible, high quality products for the British market, and our preferential access needs to continue regardless of Britain’s membership of the EU,” the Minister said.
“The importance of Sri Lanka’s openness to trade, without which, investors from the UK or anywhere wouldn’t find us an attractive destination to do business in.
For too long we have been frogs in a well, while the rest of the Asian region overtakes us. Trade liberalisation is a must if we are to progress and prosper. We are too small a domestic economy to do without it,” Minister Samarawickrama said.
“The trade Chambers should be more active about getting these trade agreements done faster. Otherwise we are at risk of being left behind.”
There are now 170 Free Trade Agreements in the Asia Pacific region. The free trade agreements cover over 40 countries in Asia alone, and a population of approximately 4.4 billion.
The next FTA to come - the Regional Comprehensive Economic Partnership or RCEP - will be the world’s largest economic bloc, with 16 countries, encompassing about one third of global GDP and almost half the world’s population.
Other countries in our region have a number of FTAs already - Singapore with 25, China with 19, Japan - 17, Korea - 17, Malaysia - 17, Thailand - 14, India - 13, Indonesia - 13, and Vietnam - 12. And these countries have more FTAs under negotiation. Just India, Thailand, Singapore, Malaysia and Vietnam alone have 39 more FTAs coming up. The Government has taken steps to integrate with these economies more than any other previous Government.
“With China, we have negotiating for an FTA as well as a Joint Economic Commission, with Singapore we have a modern and comprehensive FTA, with Korea and Japan we have Joint Economic Commissions to further trade and investment, and with India we are at an advanced stage of negotiations on the new FTA,” he said.
For the first time in history, Sri Lanka now has an FTA with an ASEAN country – Singapore – which is also the recent ASEAN chair. “We have begun talks on an FTA with Thailand, which is the current ASEAN chair. We have never had better prospects for integration with this dynamic East Asian bloc than we have today,” he added.
“There is no question that we have to do more to integrate with the world. We cannot be afraid, and we have to be bold. Our Government has taken many steps down this journey.
Now the Chambers need to strongly champion the cause of openness, not just mildly believe in it,” the Minister said.