US – SRI LANKA ECONOMIC RELATIONS – (Trade, Investment & Tourism)
Trade and Investment Framework Agreement (TIFA) between Sri Lanka and the USA
The Trade and Investment Framework Agreement (TIFA), signed by the USA and Sri Lanka on 25th July 2002 in Washington DC, provides an ideal platform for the two Governments to maintain a closer dialogue on a number of areas / fields that are of mutual interest to them.
(Click here for the agreement)
The Joint Council, formed under the TIFA had held five (5) meetings by end 2006. Sri Lanka delegation to the 5th meeting, which was held on 1st December 2006 in Colombo, was headed by Hon. Jeyaraj Fernandopulle, the then Minister of Trade, Commerce, Consumer Affairs and Marketing Development, while the US side was headed by Duty USTR, Ambassador Karan K Bhatia. The 6th Meeting of the Joint Council is to be held during 2007 in Washington DC.
The main elements of interests pursued during the TIFA meetings include;
On the Sri Lankan side: (a) Securing preferential market access for Sri Lanka’s exports in the US Market, (b) Obtaining technical assistance and (c) Economic cooperation.
Meanwhile, the US government attaches high importance to areas such as (a) Government procurement procedures in Sri Lanka, (b) Trade liberalization measures, including tariff and para-tariffs of Sri Lanka, (c) Relaxation / rationalization of Sri Lanka’s regulations with regard to importation of genetically modified (GM) foods, poultry products etc., (d) Resolving issues pertaining to US investments in Sri Lanka, (e) Effective enforcement of Intellectual Property Rights (IPRs) and (f) Sri Lanka’s position in the WTO negotiations.
US-Sri Lanka Bilateral Trade Relations
The US continues to be the single largest export destination for Sri Lankan products with over 22% of its exports. Sri Lanka’s exports to the US demonstrated an impressive growth of 8.4 % in 2012 compared to 2011. According to the latest trade statistics, Sri Lanka’s exports to the US amounted to US $ 2.36 Billion.
Imports to Sri Lanka in 2012 was US $ 224 million while total trade turnover between Sri Lanka and the US remained at all time high of US $ US 2.56 billion. The balance of trade is in Sri Lanka’s favour amounting to US $ 2.1 billion.
The growth momentum demonstrated in 2012 is more vital particularly at a time when Sri Lanka’s export performance faced daunting challenges in 2012.
Sri Lanka’s trade with the US
Year Exports from Sri Lanka Imports into Sri Lanka Balance of Trade
US $ Million US $ Million US $ Million
2010 1884 178 1600
2011 2134 307 1834
2012 2366 224 2144
The composition of Sri Lanka’s export basket is indicated below
In terms of Foreign Direct Investment and Tourism, the US is becoming a very important partner for Sri Lanka.