Dismissing criticism, Development Strategies and International Trade Minister Malik Samarawickrama last week emphasised that the Government had put national interest “front and centre” when negotiating Free Trade Agreements.
“Despite what you may hear in the news from the detractors of the agreement, we kept national interests and the interests of our domestic stakeholders front and centre when negotiating the agreement,” Minister Samarawickrama said with reference to the FTA signed with Singapore earlier this year.
“We believe it is a good agreement that will strengthen our country’s economic prospects, not hurt it. We are well aware that some of the professionals are only interested in looking after themselves and not in improving the living standards of our people,” the Minister said during his address at the first ever ‘Power of Interaction with Asian Region Diplomats’ event organised by the Ceylon Chamber of Commerce.
FTA talks with Thailand in July
Bilateral talks for a Free Trade Agreement (FTA) with Thailand are likely in July this year, Minister Malik Samarawickrama disclosed. The move follows the two countries successfully holding scoping exercise last week, he added.He said to have brokered Sri Lanka’s first comprehensive agreement with a country like Singapore – regarded as being one of the most open and liberalised economies and having high-quality institutions – was an especially important milestone for Sri Lanka.
“The Singapore-Sri Lanka FTA is part of a broader strategy of looking towards Asia to strengthen our trade relationships. While we focus on growing and sustaining our traditional markets of the US and Europe, we have begun to diversify our markets towards Asia and focus on plugging into Asian supply chains,” he said.
“The Singapore FTA is the first step towards closer integration with ASEAN, and potentially being part of the RCEP, Regional Comprehensive Economic Partnership, in the future,” Minister Samarawickrama added.
According to him, to complement the FTAs and trade reforms, the Government was ensuring that domestic industries were not exposed to unfair trade practices. After nearly a decade’s delay, the Government managed to pass in Parliament a robust Anti-Dumping and Safeguard Measures Act.
To address the issue of land availability for new investors and being mindful of water and waste concerns, we are preparing new industrial zones for foreign investors to locate - the new Hambantota Port and the Logistics and Industrial Zone in the south, a new zone in Milleniya with a Thai investor and three other new zones, he revealed. These are open for private investors from Asia to develop in partnership with the BOI.
“I want to reiterate our keen interest in attracting Asian foreign direct investment to our country, especially in export-oriented manufacturing and firms that can bring in know-how and new technology,” he added.
The Minister expressed hope that Sri Lanka’s friends in the diplomatic community would help the country in its endeavour to bring in new Asian investment partnerships and colleagues of the Sri Lankan corporate community and partner them to forge new and exciting business opportunities and help the country diversify from its current comfort zones.
“As a small nation with big aspirations, we need to work collaboratively with our Asian counterparts to grow and prosper together. And as Sri Lanka continues on our new path of progress, we are very keen for Asia to play a vital role in our journey,” Samarawickrama emphasised.
During his address, he also said that Sri Lanka had ambitions of becoming an attractive place for business in Asia and serving as a hub in the Indian Ocean. Towards this goal, the Government has taken numerous initiatives to stabilise and re-orient the economy, from a growth model that was inward-looking and heavily dependent on debt-fuelled public spending, to one driven more by the private sector, trade and FDI.
To leverage on Sri Lanka’s location and expand market access, the Government is expanding trade and investment links with a diverse set of countries – the US, EU, India, China, Singapore and Japan - and signing a number of trade agreements.
Samarawickrama said that having stabilised the economy over the last two years, attracting foreign investment was a key priority of the country right now and “we are very keen to attract more FDI from Asia.”
The Minister explained there were several reasons why Sri Lanka was a compelling proposition for investors from Asian countries. Firstly, there was a lot of untapped potential and many green field opportunities at a time when competition is fierce in other Asian economies, whether it is the competition for resources or opportunities. Sri Lanka offers Asian investors the chance to be at the frontier of new things, and expand their business opportunities.
Secondly, Sri Lanka is unique in this region for having very good diplomatic ties with all countries in Asia. Unlike several Asian countries that have various tensions with others in the region – either disputes stemming from past conflict, or territorial or border disputes – Sri Lanka does not have such issues with Asian countries. Therefore, this provides a unique platform for any investor from any Asian country to come here and feel welcome, the Minister revealed. We have no preferred Asian partners. All of Asia is our partner and all Asian countries are important to us, he said.
Thirdly, Samarawickrama said that Sri Lanka was a springboard to other nearby regions that are emerging growth hubs. Already he said there was news of several Japanese investors who saw Sri Lanka as a useful springboard to Africa, Europe and South Asia. Similarly, many other East Asian countries found Sri Lanka a useful gateway to the large and growing South Asian market. This geography offers very unique opportunities to investors from East and South East Asia, Minister Samarawickrama added.