Sri Lanka should develop and implement long term strategic visions and make use of the country’s location as a maritime hub as well as an IT hub to support the economic growth, said Tung – Lai Margue, Ambassador and Head of Delegation of the European Union to Sri Lanka and to the Maldives, at the seminar on ‘International Trade Agreements: Policy options for Sri Lanka’ on Wednesday. “Trade agreements impact the growth of a country. Sri Lanka has the opportunity to further develop as a trading hub if proper plans are put into action,” he said.
He also said that the way to move forward is to look for global value chains in which the country fits in and provide added values instead of closing borders for imports. European Union (EU) is considered as one of the trusted partners by many countries with its trade agreements and the benefits it had brought for the growth of the respective countries in reaching sustainable development goals.
With regaining the GSP plus facility in 2017, Sri Lanka gained a numerous progress in conducting trade activities. Accounting for 16% total trading in 2018 before India and China, the EU is Sri Lanka’s largest trading partner. It is also the country’s biggest export destination with nearly 30% of exports going to Europe valuing for 2.8 billion Euros. Since its reinstatement the total trade with EU has increased by 20%.
The most notable growth sectors of the country are tea, tyre, clothing, gems, motor vehicle parts and footwear. “However I’m fully aware that with the recent growth and Sri Lanka becoming an upper middle income country this year, it would sooner or later loose the benefits of GSP plus facility possibly within three years’ time. But closing down these markets for trade and going for imports will not be a suitable option,” he said. Thus proper trade agreements and policies are of vital importance.
He also noted that South Asia is expected to grow up to 6 to 7 per cent in the years to come and Sri Lanka as a new upper middle income country should be a part of this regional growth.
National Project Coordinator, EU – Sri Lanka Trade related Assistance, ITC, Dayarathna Silva said, “I’m proud to say that the International Trade Center (ITC) collaborated more than 30 to 35 stakeholders of both the public and private sector in delivering trade related assistance on our focused areas to enhance their competitiveness throughout the last few years under the EU – Sri Lanka trade related assistance project”.
Sri Lanka need to look beyond the board to achieve benefits. Thus proper determination on what policies and trade agreements that need to be used should be there to increase benefits. The multilateral trading system is going through an intense period of changes and the world sees itself mired in geo-politics with the value of multilateralism questioned. Thus it is crucial to know what the key emerging global trade, economic and governance trends and their impact on the developing countries.