Columns

• President and team shed ‘novice’ label in international negotiations, but Harsha claims there were ‘behind-the-scenes’ hands
• UNP points to Trump’s conditions connecting trade and security agreements with tariff reductions
• Parliament set to pass bill to repeal benefits enjoyed by past presidents and presidential widows; Resolution to oust Deshabandu next week
• Lanka reiterates support for two state solution at UN conference on Palestine, but comes under pressure over free visa to Israeli tourists

By our Political Desk

The National People’s Power (NPP) government claimed a major victory this week as the Trump administration made a further reduction in the “reciprocal tariff” rate it had imposed on Sri Lankan goods exported to the United States. The announcement, which reached Sri Lanka early Friday, was welcomed by representative bodies of the business community and politicians. A sense of relief was reflected at the Colombo Stock Exchange, which hit a historic high at the close of trading on Friday, with the benchmark All Share Price Index (ASPI) surging by 271.77 points to close at a record 19,914.25, a gain of 1.38%.

Indeed, when US President Donald Trump unveiled his “Liberation Day” tariffs at the White House on April 2 this year—his administration’s reciprocal tariffs targeting dozens of countries—the 44% tariff he imposed on Sri Lanka’s exports sent shockwaves through the political and business establishments in the country. There were real fears that such a massive tariff rate would strike a devastating blow to an economy still recovering from an unprecedented economic crisis. There were also concerns that the NPP government, barely six months old then, was out of its depth and lacked the experience and skills needed to negotiate with a US government led by a president determined to reshape global trade.

President Anura Kumara Dissanayake arrives for the official welcome hosted by Maldivian President Mohamed Muizzu

Government’s “team effort” yields significant tariff reduction

The Sri Lankan negotiating team had held discussions with the Office of the US Trade Representative over the past several months on narrowing the trade deficit between the two countries and improving market access. Meetings have occurred between the two sides physically in Washington, D.C., and virtually as well. Progress along these talks led to the 44% tariff rate being slashed to 30% a month ago.

President Anura Kumara Dissanayake, criticised for not going to Washington himself for a one-on-one meeting with Trump, like some other world leaders did, held a virtual discussion with US Trade Representative Ambassador Jamieson Greer on July 25. Treasury Secretary Harshana Suriyapperuma praised the President’s leadership and personal intervention on the matter when he addressed a news conference on Friday to outline the progress that had been achieved to reduce the US tariff rate. He pointed out that as soon as the US tariffs were announced in April, the President convened meetings with industry stakeholders and business leaders, taking a consultative approach to the matter. Some leading garment exporters, however, complained they were not consulted. Dr. Suriyapperuma also singled out several members of the President’s team for special praise for their role in the negotiations that eventually brought the tariff rate down from 44% to 20%. They were Central Bank Governor Nandalal Weerasinghe, the President’s Senior Economic Advisor Duminda Hulangamuwa, Trade Ministry Secretary K.A. Vimalenthiraja and Sri Lanka’s Ambassador to the US, Mahinda Samarasinghe. Dr. Suriyapperuma added that it was thanks to this “team effort” that the result was achieved.

“Usually, trade negotiations aimed at clinching a trade agreement are an exhaustive process that takes years, but on this occasion, we had only about 90 days to negotiate,” the Treasury Secretary pointed out. He expressed gratitude for the contributions made by government agencies, as well as the support and understanding of officials from the US Trade Representative’s office and other branches of the US government during the negotiation process. The main objective on the Sri Lankan side when conducting these negotiations was how to move forward with this process whilst maintaining the competitive market advantage Sri Lanka held in the region, the Treasury Secretary added. “Rather than being focused on a percentage, our focus was on providing the opportunity to those in our goods and services export sector in the region to be competitive in the international market and maintain our market share. The information we have shows that we have been able to achieve this primary objective.”

According to the new tariff rates announced by the White House on Friday, most countries in the region that Sri Lanka competes against in trade have tariffs that are equal to or just below Sri Lanka’s. India, though, has had a 25% tariff slapped on it by the Trump administration, along with an as yet unspecified “penalty” for purchasing Russian crude oil and military equipment. The Trump administration argues that such purchases are helping Russia fund its war against Ukraine. Viet Nam, which the Trump administration claimed reached a trade deal with the US last month, has a 20% tariff on its exports. Bangladesh too has a 20% tariff on its exports to the US. Pakistan, Thailand, Cambodia and Indonesia have fared a little better than Sri Lanka, having been imposed a tariff of 19%. Laos and Myanmar, however, have both had tariffs as high as 40% imposed on them.

Room for further tariff reduction

The sweeping US tariffs targeting dozens of countries, Sri Lanka included, will go into effect from August 7. There is, however, room for more negotiations to further reduce the tariff rate, Dr. Suriyapperuma said, adding that Sri Lanka hopes to continue the negotiation process. This includes finding ways to further reduce the trade deficit, opening up Sri Lanka’s market more to the US, and exploring how Sri Lankan investors and industrialists can obtain more access to the US market.

Though the Trump administration had boasted of being able to strike “90 deals in 90 days” shortly after pausing the initial tariffs it had planned to impose with effect from April 9 for 90 days, it has fallen far short of that, with just eight deals announced in 120 days, including with the 27-member European Union. Even the terms of the deals already announced remain murky, with key details still to be decided. South Korea, for example, said on Friday that there is no written agreement yet with the US on a trade deal, despite an announcement by the White House and President Trump on his social media site, Truth Social. Negotiators between the two sides had only reached a verbal agreement, and there is every possibility of disputes emerging on the agreement’s interpretation when negotiations begin on inking a trade deal.

Sri Lanka too is yet to reach a trade agreement, and as such, the negotiation process will continue to see if a deal can be struck, and with no further deadline being announced by the Trump administration for countries to sign a trade deal or face higher tariffs, the 20% tariff rate for Sri Lanka is set to remain for the foreseeable future, unless negotiators between the two sides are able to reach an agreement soon.

What did Sri Lanka offer the US?

As for what Sri Lanka has offered to the US in return for reduction of tariffs, Dr. Suriyapperuma noted that Sri Lanka was a net importer of energy, raw materials and advanced machinery. “Sri Lanka imports a significant amount into the country for use of our industries and our businesses, and also for our consumption purposes. Since Sri Lanka is importing these items anyway, we were discussing how to open up our market without any discrimination,” he said, adding that the government intends to look at existing trade barriers such as tariffs and para-tariffs “in a very constructive manner” and look at where the market can be opened up. “Our approach is to provide competitive market access to US suppliers,” he said, noting that rather than government-to-government engagements, it would be US businesses that would be considering supplying to Sri Lanka. While tariffs are one angle, the government is also looking at trade facilitation, the Treasury Secretary revealed. Rather than being limited to products and services, the process encompasses what Sri Lanka can offer given that it is also working within an International Monetary Fund (IMF) framework. This includes progress made on governance enhancement, reducing the cost of doing business, increasing efficiency and having zero tolerance for corruption, Dr. Suriyapperuma added.

Given that tariffs on Sri Lanka have been reduced substantially by as much as 24% compared to the rate announced in April, it can be deduced that the Trump administration has been receptive to offers made by Sri Lanka, though there is still no clarity on all that had been agreed on, nor is there a guarantee that the US will demand more as negotiations move forward.

Opposition asks Govt. to come clean on “trade and security agreements”

Opposition MPs too welcomed the substantial reduction in US tariffs. “Glad the US cut tariffs to 20% for Sri Lankan goods. Puts us with Vietnam and Bangladesh, while India pays 25%. We should aim for under 15% to give our exporters a real lift. We should have a team of trade economists and lead negotiators to keep pushing,” Opposition Leader and Leader of the main opposition Samagi Jana Balawegaya (SJB) Sajith Premadasa said, urging the government to continue negotiations to further reduce the tariffs.

“Glad our #USTarriffs are at 20% so we can continue to be regionally competitive. Credit goes to all who worked on it on our #SriLanka side (seen and unseen) and appreciation to @USTradeRep for understanding our limitations. Let’s now seriously work on breaking down the walls around us and building bridges to the world!” said SJB Colombo District MP and Chairman of Parliament’s Committee on Public Finance, Dr. Harsha De Silva, in an X post. Speaking to the media afterwards, the SJB MP said this was a collective victory, claiming that ‘behind the scenes,’ the SJB too supported government efforts to try and reduce the tariff rate without laying down obstacles. He did not elaborate on what the ‘behind the scenes’ support the SJB gave the government was, nor did the government acknowledge any such ‘behind the scenes’ support from the SJB, with one of them saying, “The SJB is trying to get on the footboard of the victory bus.” Dr. De Silva added, “I’m not looking at this as a political victory. I’m looking at it as an opportunity for the country to move forward,” though he acknowledged that President Dissanayake should “naturally” receive some credit as the country’s President for the reduction in the tariff.

Dr. De Silva also said it is now time for the country to bring down the trade barriers it has built around itself and build trade bridges with other countries in the region. He urged the government to improve trade relations with India, whose southern states especially are on a rapid path towards development over the next two decades.

While welcoming the news of a further tariff reduction, some others in the opposition also asked the government to be transparent on what Sri Lanka had agreed to give the US in return. The United National Party (UNP) was among them. Releasing a statement, the party congratulated the government and its negotiating team for successfully concluding trade negotiations that resulted in a further reduction in tariffs. Nevertheless, it pointed to Section 2(b) in President Trump’s Executive Order dated July 31 announcing the imposition of the reciprocal tariffs for countries, including Sri Lanka. The relevant section states, “Certain foreign trading partners identified in Annex I to this order have agreed to, or are on the verge of concluding, meaningful trade and security agreements with the United States. Goods of those trading partners will remain subject to the additional ad valorem duties provided in Annex I to this order until such time as those agreements are concluded, and I issue subsequent orders memorialising the terms of those agreements.”

In this context, the UNP called on the government to make a clear statement on what is meant by reaching “meaningful trade and security agreements with the United States.”

Sri Lanka Podujana Peramuna (SLPP) National Organiser Namal Rajapaksa also joined these calls. Posting on X, the MP congratulated the NPP government “for being persistent in its discussions with the US trade representatives.”

“However, I call on the Government to be transparent on the ‘meaningful trade and security agreements’ reached with the US Government in order to get the tariff reductions. While we have to ensure that our exporters get relief and can compete in the global market, we also have to ensure that all agreements reached with international partners are transparent and will not affect the sovereignty of the country. I call on the government to release the agreement details to the public and the conditions reached,” Mr. Rajapaksa said.

Moves to scrap special privileges of
former presidents and widows

While the government claimed a vital victory on the international front that has prevented a potentially crippling blow to the country’s still fragile economy, it also took a step this week at following through on a campaign promise that garnered much attention during the past year: reducing the special privileges enjoyed by former presidents and their widows. Accordingly, the Presidents’ Entitlements (Repeal) Bill has now been published. As the name suggests, the new bill aims to repeal the existing Presidents’ Entitlements Act No. 04 of 1986.

Under provisions of the new bill, any residence provided to or monthly allowance paid to a former president or the widow of a former president, monthly secretarial allowance paid to and official transport and such other facilities provided to a former President or the widow of a former president, and the monthly pension paid to the widow of a former President shall no longer be provided with, or paid to, once the bill is passed and signed into law. Former presidents, though, will continue to be paid their pension.

The new bill, if passed, will impact the five living former presidents—Chandrika Bandaranaike Kumaratunga, Mahinda Rajapaksa, Maithripala Sirisena, Gotabaya Rajapaksa and Ranil Wickremesinghe—as well as Hema Premadasa, wife of the late President Ranasinghe Premadasa.

The NPP had long pledged to strip the special privileges accorded to former presidents and their widows, claiming it to be a waste of taxpayer funds.

In June, the Cabinet approved a proposal by Justice Minister Harshana Nanayakkara to instruct the Legal Draftsman to draft two bills—one to remove (“repeal”) the special benefits of former presidents and their families and the other to cancel the pension paid to parliamentarians after five years of service.

The Cabinet decision was adopted a day after the Sunday Times, drawing on information from a document obtained under the Right to Information (RTI) Act, wrote that the government has deleted from the Justice Ministry’s action plan its commitment to abolish the privileges of former presidents.

Moves to cancel the pension paid to former parliamentarians, meanwhile, have run into opposition from some former MPs themselves. The Retired MPs’ Collective has publicly stated it is contemplating legal action over the move, while also taking up the matter with the International Parliamentary Union (IPU) and the United Nations Human Rights Council (UNHRC) in Geneva.

Deshabandu set to be removed as IGP

When Parliament convenes for its first sitting of the new month on Tuesday (5), the NPP government is also hoping to pass through a resolution removing Inspector General of Police (IGP) Deshabandu Tennakoon from his post for misconduct and gross abuse of power. This comes after a three-member committee appointed to probe the allegations against him found Mr. Tennakoon guilty of 19 of the 23 charges made against him. The committee was headed by then Supreme Court Justice (now Chief Justice) Preethi Padman Surasena and also included the Chairman of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), Justice W. M. N. P. Iddawala, and National Police Commission Chairman Lalith Ekanayake.

Charges 1 to 16 were related to the shooting outside the W15 hotel at Pelena in Weligama on December 31, 2023. It left an officer from the Colombo Crime Division (CCD) dead. Charges 17 to 19 accused Mr. Tennakoon of going into hiding from February 27, 2025, to March 19, 2025, disobeying the orders made by the Matara Magistrate’s Court to arrest him in connection with the shooting outside the W15 hotel. Charges 20 and 21 accused Mr. Tennakoon, in his capacity as the then Senior Deputy Inspector General (SDIG) of Police of the Western Province, of failing or omitting to act to prevent the attack on peaceful protesters at Galle Face on May 9, 2022, while charges 22 and 23 accused him of bringing disrepute to the office of the IGP and the Police Department by committing one or more of the aforesaid acts of misconduct and/or acts of gross abuse of power.

The CoI found the IGP guilty of Charges 1 to 10, 13 to 19, and 22 and 23. The resolution to remove him from office is now listed in Parliament’s Order Paper for August 5 and will be debated from 11.30am to 4.00pm, with a vote on the resolution expected at 4.00pm.

Following is the full text of the resolution:

“Resolution to remove the Inspector-General of Police, Mr. T.M.W. Deshabandu Tennakoon from the office of the Inspector-General of Police in terms of Section 17 of the Removal of Officers (Procedure) Act, No. 5 of 2002.

“Whereas the Parliament on the 08th of April, 2025 passed the Resolution No. P.29/2025 appeared in the Order Paper of Parliament dated 08.04.2025 and a Committee of Inquiry (hereinafter referred to as the “Committee”) was appointed under Section 5(2) and Section 6(b) of the Removal of Officers (Procedure) Act, No. 5 of 2002, to inquire and report its findings in respect of the allegations in the said Resolution;

“Whereas in terms of Section 8(1)(b) of the said Act, the Committee had made its findings and communicated such findings to the Speaker on 21.07.2025; whereas the Report of the Committee containing its findings has been tabled before the House by the Speaker on 22.07.2025;

“Whereas the Committee, having conducted its inquiry, has found the Inspector-General of Police guilty of Charges No: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 13, 14, 15, 16, 17, 18, 19, 22, and 23, out of the total 23 charges levelled against him in the Charge Sheet annexed to the said tabled Report;

“This Parliament resolves, under Article 41C(3) of the Constitution of the Democratic Socialist Republic of Sri Lanka read with Section 18 of the Removal of Officers (Procedure) Act, No 5 of 2002, that the Inspector General of Police, Mr. T. M. W. Deshabandu Tennakoon, based on the findings of guilt recorded by the Committee of Inquiry and the said Report tabled before this House, be removed from the office of the Inspector-General of Police.”

The resolution needs only a simple majority to pass, an easy task for an NPP government that has a comfortable 2/3 parliamentary majority. Once the resolution is passed, under provisions of the Removal of Officers (Procedure) Act, No. 5 of 2002, the holder of the office of IGP can be removed from his post by the President.

While the government can easily pass through the resolution, it will be interesting to see whether opposition parties too will join the vote to remove Mr. Tennakoon. The SJB, for example, has been highly critical of Mr. Tennakoon’s conduct as the IGP. Chief Opposition Whip and Galle District SJB MP Gayantha Karunathilaka told the Sunday Times yesterday that the party would decide on its position on the resolution when the SJB’s Parliamentary Group meets tomorrow (4) to discuss business in the upcoming Parliamentary week. SLPP Galle District MP Chanaka Madugoda, meanwhile, said his party too is yet to take a decision on how it will vote on the resolution.

President’s Maldives visit and the balancing act between Palestine and Israel

President Anura Kumara Dissanayake undertook a state visit to the Maldives from July 28 to 30, 2025 at the invitation of President Mohamed Muizzu—his sixth overseas visit since taking office in September last year.

Ahead of his visit, Foreign Minister Vijitha Herath announced that Sri Lanka will give a one-year visa to citizens of the Maldives effective from August 1. During President Dissanayake’s visit to the Maldives, there was reciprocity of the Lankan action with the announcement that Sri Lankan citizens travelling to the Maldives for tourism purposes will be granted a free 90-day on-arrival tourist visa. This visa facility took effect from July 29. Prior to this, Sri Lankans were issued a 30-day visa to the Maldives.

Last week, the government also announced that it would give a visa fee waiver to forty countries to boost tourist arrivals in the country, but the decision to include Israel on the list has drawn some flak, particularly on social media.

The announcement also came days before the High-level International Conference for the Peaceful Settlement of the Question of Palestine and the Implementation of the Two-State Solution, which took place in New York from 28 to 30 July. France and Saudi Arabia co-chaired the conference.

Sri Lanka’s Permanent Representative to the United Nations in New York, former Chief Justice Jayantha Jayasuriya, addressed the conference, which was attended by almost all members of the UN. The United States and Israel did not attend.

Ambassador Jayasuriya, in his address, said that Sri Lanka appreciates France and Saudi Arabia for their leadership in driving this much-needed multilateral effort to promote a peaceful question of Palestine and the implementation of the two-state solution. “While Sri Lanka condemns the brutal attacks on 7th October 2023, the unending catastrophic situation we have seen on a daily basis since has resulted in unimaginable human suffering in the occupied Palestine territories,” he said.

Mr. Jayasuriya said that Sri Lanka’s solidarity with the Palestinian people remains consistent and that the realistic and lasting way to achieve lasting peace is through a two-state solution. He also said that Sri Lanka recognises the legitimate security concerns of both the Israelis and Palestinian people and acknowledges the suffering people of both sides have experienced due to decades of violence and conflict. “This is the exact reason why Sri Lanka maintains that dialogue remains the only viable option to effectively address the issues of both parties and the region as a whole,” he said.

He also made several proposals on behalf of the country. These included an immediate ceasefire; the release of all hostages of all parties, including children and women, as a catalyst for building trust; allowing UNRWA (the United Nations Relief and Works Agency for Palestine Refugees) and other UN agencies to carry out their mandates in the Palestine territories without any obstruction; a UN-monitored mechanism to disarm all armed groups in Palestine; an immediate halt to all new settlements in the Occupied Territories of Palestine; and full membership for Palestine in the United Nations, which has been endorsed by the General Assembly.

In May 2024, the U.N. General Assembly overwhelmingly backed a Palestinian bid to become a full member by recognising it as qualified to join and recommending the U.N. Security Council “reconsider the matter favourably.” This will come up again at the meeting of the UN General Assembly next month.

So while this government has been following the policy adopted by successive Sri Lankan governments of firmly backing Palestine statehood, it’s becoming a fine balancing act with the growing number of Israeli tourists visiting the country as well as the increasing number of Sri Lankans seeking employment in Israel. How the government balances this in the months ahead will be crucial.