Monday, April 08, 2002
Sri Lanka wants free trade with US
REUTERS
COLOMBO: Sri Lanka wants free trade with the United States in a bid to boost greater access for its garments and textiles, a senior official said on Monday.
An agreement could take about two years to draw up and would follow recent talks between the United States and countries in Southeast Asia, said Arjunna Mahendran, chairman of the island's Board of Investment.
Two cabinet ministers handling trade and commerce in the war-weary country were expected to visit the United States next week to "lay the basis for talks on a free-trade agreement", Mahendran said.
An official of the United States embassy in Colombo said it welcomed the visit of the ministers but did not comment on a possible free-trade agreement.
"We understand that they intend to discuss a wide range of issues impacting on the bilateral trade relationship," the official said.
"The US sees the visit as an opportunity...especially to increase opportunities for American businesses in Sri Lanka."
Sri Lanka is worried about losing market share in the United States to lower-cost countries ahead of a phasing out of a system of quotas in 2005 for countries exporting to the United States under the Multi-Fibre Arrangement.
The balance of trade is about eight times in Sri Lanka's favour with exports of about $2 billion -- mainly garments manufactured under top labels -- to the United States.
"We will have to give something in return and I suspect that will be the liberalisation of services," Mahendran said.
"Banking, tourism and other types of consultancies in law and accountancy are areas where the Americans can come in.
"Immediately we are also seeking duty concessions for garments," he said.
Sri Lanka has just signed a ceasefire pact with separatist Tamil Tiger guerrillas and is hoping to gain maximum mileage from a possible peace dividend in the next few years.
Peace talks to end the nearly two-decade long conflict are expected to be held in Thailand in May.
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