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.
Trade Relations:
The United States of America (USA) continues rank Sri Lanka’s no. 1 export market, accounting for nearly 1/3 of Sri Lanka’s exports, whereas the USA accounts for only about 3% Sri Lanka’s total imports. The table below indicates the value of bilateral trade over the last few years.
Sri Lanka’s Trade with US : 2001 – 2006
|
Year
|
SL’s exports
|
SL’s imports
|
Total Trade
|
Balance of Trade
|
|
2002
|
1,810.5
|
171.9
|
1,982.2
|
1,638.6
|
|
2003
|
1,808.0
|
154.7
|
1,962.7
|
1,653.3
|
|
2004
|
1,956.9
|
163.9
|
2,120.8
|
1,792.9
|
|
2005
|
2,079.7
|
179.7
|
2,258.7
|
1,900.0
|
|
2006
|
2,141.7
|
224.7
|
2,366.4
|
1,916.3
|
Value : in Million US $ Source : The US Bureau of Census
Major exports from Sri Lanka:
Apparel & Textile Products (79%), Rubber & rubber products ( 7%), Gems & jewellery (3%), Plastics (1.3%), Nuclear reactors (1.3%), Tea (1%), Seafood (0.8%), Ornamental fish (0.1%)
Spices (0.05%)
Major Imports:
Nuclear reactors (41%), Electrical machinery & equipment (14%), Optical / photographic, cinematographic / measuring / medical & surgical instruments etc. (5%), Paper & paper articles (3.2%)
Exports of Apparel and Textile products
Based on the statistics issued by the U.S. Department of Commerce, value of apparel exports from Sri Lanka to the US during 2006 has recorded an increase of nearly 2% from $ 1650.21 million in 2005 to $ 1682.43 million in 2006. However, the value textile exports, declined from $ 26.8 million in 2005 to $ 20.4 million in 2006, registering a decline of 24% over 2005.
