Washington promises preferential trade to Lanka

The United States is promising Sri Lanka preferential trade facilities in what is set to be a building block approach to developing a partnership just short of a Free Trade Agreement. A US trade delegation comprised of five high level policy makers, headed by Deputy US Trade Representative (DUSTR) Karan K. Bhatia was here this week on a brief visit for what was a periodic assessment of the Trade Investment Framework Agreement (TIFA) signed in 2002.

In six rounds of discussions squeezed into a two-day visit Sri Lanka’s Trade and Commerce officials campaigned for preferential trade in the US market with a special focus on the apparel sector. In an exclusive telephone interview with The Sunday Times held just after the conclusion of the trade talks on Friday. Mr. Bhatia said the discussions were very productive and enabled the surveying of the entire trade relationship.

He said the US would now be looking at ‘a building block approach towards liberalizing trade’. He said this would pave the way to a working arrangement just short of a Free Trade Agreement. Mr. Bhatia said while trade ties between the two nations have grown, that growth remains at a modest 4-5 percent compared with other trading partners.

He said efforts would be made to strengthen trade ties but added that much follow-up was needed with regard to some of Sri Lanka’s TIFA commitments. He specifically said Sri Lanka’s intellectual property regime required strengthening and further cooperation was needed to clamp down on the trade in illegal textiles.

Meanwhile the US had also pledged assistance to Sri Lanka via the Millennium Challenge Cooperation (MCC) project. Trade and Commerce Secretary R.M.K. Ratnayake told The Sunday Times that Mr. Bhatia pledged some ‘significant’ grants which would be invested in capacity building in areas such intellectual property and trade and customs regulation. The US trade delegation also had discussions with members of the Joint Apparel Association Forum (JAAF) which came on the back of the apparel sector experiencing a negative one percent growth in the US market for the first time. The US is Sri Lanka’s number one apparel market.