Sri Lanka in push for stronger economic ties with US

July 17, 2012 at 3:32 pm

By Charitha Fernando

July 17, 2012 (LBO) – Sri Lanka is pushing for stronger economic ties with the United States which will strengthen overall diplomatic relations between the two countries, a top diplomat said.

“At this point we have a very straightforward and genuine relationship with the US,” Sri Lanka’s envoy to the United States, Jaliya Wickremasuriya said.
“We don’t agree to everything the US says nor do we say no to everything. In the future we should do more business with the US and take our relationship to the next level.”

The US is Sri Lanka’s biggest trading partner with 22 percent of the island’s exports- mostly garments going to the American market.

The two countries trade goods to the value of around 2.4 billion US dollars out of which Sri Lankan exports fetch around 2.15 billion US dollars.

US-based investors bought about half of billion US dollar sovereign bond last year, and a similar pattern has been seen in earlier sovereign bonds.

Templeton, a US based fund management group is perhaps the largest foreign holder of rupee securities.

Diplomatic relations with the United States have clouded by pressure on Sri Lanka to investigate alleged war crimes by soldiers and Tamil Tiger separatists during the final stages of a 30-year civil war which ended in 2009.
In March this year the UN Human Rights Council passed a US led resolution backed by the island’s closest neighbor India demanding Sri Lanka to probe alleged rights violations by government forces and the Tamil Tigers.

Sri Lanka’s envoy in Washington says stronger economic ties could help build healthier bilateral relations between the two countries.

“The US is a very good trading partner. When economic relationships are enhanced the political relationships will also improve,” Wickremasuriya said.

Earlier this year the United States allowed Sri Lanka to continue receiving preferential trade concessions after “noteworthy efforts” were taken to address worker issues in the island.

The programm came under review on a complaint over shortcomings in Sri Lanka’s labour rights.

“We had two years of discussions with them to explain how our factories work and our labour rights. They came here and saw it,” Wickramasuriya said.

“They dropped the case and said labour issues are resolved properly and labour rights are good”

Under the US Generalized System of Preference (GSP) program Sri Lanka gets duty free access to nearly five thousand of its export products to the US market valued at 135 million US dollars.

Sri Lankan exports to the US has increased nearly 30 percent during the first three months of 2012, compared to a year earlier, the Sri Lankan embassy in Washington said.

US companies have been scouting for investment opportunities in the island’s infrastructure development projects, tourism, outsourcing and energy sectors including oil refining.

“Sri Lanka is now safe for US companies to come and invest in,” ambassador Wickramasuriya said.

The Sri Lanka embassy in Washington has been instrumental in organizing several investor meetings both in the US and in Colombo.

Wickremasuriya said negotiations are on with several US companies keen on investing in alternate energy generation projects.

“I’ m sure within the next couple of years we will have many American companies in Sri Lanka,”

He said the embassy holds regular investment promotion seminars in Washington for American businessman interested in setting up business in Sri Lanka.