While trade is improving, no FTA between SL and Australia
While bilateral trade between Sri Lanka and Australia has been very strong in recent times, a free trade agreement (FTA) between the two countries is very unlikely, according to Bryce Hutchesson, Australian High Commissioner to Sri Lanka.
He made these comments at the ‘Meet the High Commissioner’ discussion organised by the National Chamber of Commerce of Sri Lanka in Colombo last Tuesday.
Officials say Sri Lanka is aiming to sign trade and services pacts with India, China and Singapore among 0ther countries.
But the Australian High Commissioner ruled out any FTA between the two countries during the question-and-answer discussion. He said, “The Sri Lanka–Australia partnership has been seven years, not only with the government but the private sector as well. Both countries have worked with the scope of diversified trade, adding value to the traditional goods. We sell wheat and you sell paper to us. The trade value is expected to crack US$ 1 billion very soon.”
Sri Lanka is among the top 60 countries to have partnerships with Australia in terms of exports and imports volume. The Colombo Stock Exchange is planning a roadshow in Australia next year to create awareness among potential investors, he noted. “One of the main challenges for Sri Lanka is the insufficient revenue base for the government. The country needs to attract more foreign direct investments for infrastructure which will be an attractive strength,” he stressed.
He pointed out that apparel remains the main export to Australia with 65 per cent growth year-on-year. Vegetables and fruits exports increased by 44 per cent, beverages exports doubled and 75 per cent increase in essential oils exports last year. On the other hand kids’ toys import to Sri Lanka has grown tremendously, he noted.
“Australian businesses are eying the IT and BPO services sector here since it’s cheaper. We are very keen to open the doors to Sri Lankan products in Australia. Also there is a growing number of Australians coming to Sri Lanka. Last year 65,000 Australians visited Sri Lanka and we are expecting a 20-25 per cent increase this year,” said Mr. Hutchesson. A large percentage of Australians visiting Sri Lanka is former Sri Lankans who have settled there.
Elaborating on Australia’s growth, he said, Australia is the largest mix market economy and the third largest economy in the world that is dominated by the services sector which contributes 70 per cent to the GDP as well as other sectors such as manufacturing, food and agriculture. The country’s population being 24 million, it doesn’t have a large domestic market but international trade links.
He stressed that the automation industry in Australia will be shutting down next year with its last car production since it couldn’t compete with foreign car manufacturers. It’s going to be a difficult transition moving all those who have lost their jobs to other industries which in some way was inevitable.