By Zahida Rizvi
Speaking at the press briefing on “EU-Sri Lanka trade-related assistance” European Union (EU) Delegation to Sri Lanka and the Maldives Head of Co-operation Frank Hess said the import restrictions
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International Trade Centre (ITC) National Project Co-ordinator Dayaratne Silva addressing the gathering and delegates at the press briefing on “EU-Sri Lanka trade-related assistance”[/caption]
implemented by Sri Lanka, in place for more than 10 months now, are a major trade concern for the EU.
“Even if Sri Lanka can apply quantitative import restrictions in case of a critical Balance of Payments situation, it has to comply with main WTO (World Trade Organisation) obligations when invoking Balance of Payments restrictions,” he said.
Hess further pointed out that the obligation to notify about import restrictions needs to be managed in a transparent manner. The General Council is to be notified, and consultations need to be entered into with other WTO members. Additionally, temporary measures are to be applied since the current Sri Lankan regulations operate without an expiration date. It also needs to comply with the obligation to present timetables for the progressive relaxation until final elimination of the measures.
Additionally, the briefing reflected that the Generalised System of Preferences (GSP) utilisation rate was currently still relatively low, and was only concentrated in a few sectors in Sri Lanka.
“Approximately € 3 billion was exported to the EU from Sri Lanka in 2019 using the GSP+ preferences. This resulted in a positive trade balance for Sri Lanka of € 1.5 billion in 2019 alone. Even without the UK, this balance is still € 1 billion in favour of Sri Lanka,” Hess said.
Economic and trade co-operation is the focal point of the co-operation between the EU and Sri Lanka since the EU is the island’s second-largest export market, with a positive trade balance in favour of the island of more than € 1 billion (about Rs. 220 billion) in 2018 and 2019.
“To increase GSP+ utilisation, you will need to have a balanced approach and not close doors. Trade is about mutual benefits. There is a need to open up the economy, invest in research and development, provide skills to workers, nurture entrepreneurs, provide decent jobs, and most importantly, create a conducive business environment which supports both exporters and importers,” he added.
The Sri Lankan Government is keen to pursue a trade model aiming at export growth and foreign direct investment (FDI) growth, attracting foreign investment also from the EU. But, the maintenance of its domestic policies that are in place is required so as to restore the equilibrium in its Balance of Payments on a sound and lasting basis, by adopting measures which increase instead of decrease international trade.
According to the EU, global problems, such as the pandemic, spearhead economic crises, and the recovery of the Sri Lankan and global economy at present depends on open and rules-based trade, as it gives confidence for businesses to invest and re-start exchanges that bring in employment and revenues.
Photo Eshan Dasanayaka
International Trade Centre (ITC) National Project Co-ordinator Dayaratne Silva addressing the gathering and delegates at the press briefing on “EU-Sri Lanka trade-related assistance”[/caption]
implemented by Sri Lanka, in place for more than 10 months now, are a major trade concern for the EU.
“Even if Sri Lanka can apply quantitative import restrictions in case of a critical Balance of Payments situation, it has to comply with main WTO (World Trade Organisation) obligations when invoking Balance of Payments restrictions,” he said.
Hess further pointed out that the obligation to notify about import restrictions needs to be managed in a transparent manner. The General Council is to be notified, and consultations need to be entered into with other WTO members. Additionally, temporary measures are to be applied since the current Sri Lankan regulations operate without an expiration date. It also needs to comply with the obligation to present timetables for the progressive relaxation until final elimination of the measures.
Additionally, the briefing reflected that the Generalised System of Preferences (GSP) utilisation rate was currently still relatively low, and was only concentrated in a few sectors in Sri Lanka.
“Approximately € 3 billion was exported to the EU from Sri Lanka in 2019 using the GSP+ preferences. This resulted in a positive trade balance for Sri Lanka of € 1.5 billion in 2019 alone. Even without the UK, this balance is still € 1 billion in favour of Sri Lanka,” Hess said.
Economic and trade co-operation is the focal point of the co-operation between the EU and Sri Lanka since the EU is the island’s second-largest export market, with a positive trade balance in favour of the island of more than € 1 billion (about Rs. 220 billion) in 2018 and 2019.
“To increase GSP+ utilisation, you will need to have a balanced approach and not close doors. Trade is about mutual benefits. There is a need to open up the economy, invest in research and development, provide skills to workers, nurture entrepreneurs, provide decent jobs, and most importantly, create a conducive business environment which supports both exporters and importers,” he added.
The Sri Lankan Government is keen to pursue a trade model aiming at export growth and foreign direct investment (FDI) growth, attracting foreign investment also from the EU. But, the maintenance of its domestic policies that are in place is required so as to restore the equilibrium in its Balance of Payments on a sound and lasting basis, by adopting measures which increase instead of decrease international trade.
According to the EU, global problems, such as the pandemic, spearhead economic crises, and the recovery of the Sri Lankan and global economy at present depends on open and rules-based trade, as it gives confidence for businesses to invest and re-start exchanges that bring in employment and revenues.
Photo Eshan Dasanayaka