Lanka-Japan trade on the rise

FTAs are a powerful trade tool. Sri Lankan and Japanese officials should study more about FTAs before signing an FTA said Chairman of the Japanese trade and investment arm, Japan External Trade Organisation (JETRO) Hiroyuki Ishige, when he paid a courtesy call on Minister of Industry and Commerce, Rishad Bathiudeen last week.

Chairman, Japan External Trade Organisation Hiroyuki Ishige greets Minister of Industry and Commerce, Rishad Bathiudeen.

Minister Bathiudeen suggested that Sri Lanka and Japan sign an FTA agreement in the background of a continuous rise in trade with Japan. Bilateral trade between the two countries has been growing, totalling $ 770 million in 2012, an increase of 56% from 2002. In the first half of 2013 alone, bilateral trade stood at $ 413 million.

Ishige who was on a four-day tour of the country, was accompanied by a high powered Japanese business and investment delegation.

Organised by JETRO Colombo, this is one of the biggest Japanese delegations to arrive in Sri Lanka. The visit gave Japanese investors a first-hand view on investment, B2B and trade terrain of Sri Lanka.

JETRO Colombo sources said that it is collaborating with the Sri Lanka-Japan Business Cooperation Committee and the Japan-Sri Lanka Business Cooperation Committee with the support of the Embassy of Japan in Colombo.

Japan, one of the leading investors in Sri Lanka, entered the country with the opening of the economy in 1977 and continues to enhance its presence.

Japan is one of the leading global players in Lanka's industrial modernisation in recent history.

To-date, there are 39 Japanese supported projects in Sri Lanka.

Sri Lankan firms and manufacturers continuously look to Japanese investors for high tech know-how and knowledge transfer.

"Geographically Sri Lanka is in an important location. In fact it is one of the best locations in the world. However, production costs, specially energy costs are high here.

FTAs are a powerful trade tool for trade growth," Chairman Ishige said.

"FTAs are a favourite and also a dangerous topic for me. Sri Lankan and Japanese officials should study more about FTAs before signing them.

I also recommend that you to study the mega FTAs in the region and think of becoming part of the international supply chain. We, the Japanese will help Sri Lanka to join such supply chains," he said.

"We thank the people of Japan for their continuous support for Sri Lanka's growth," said Minister Bathiudeen.

"We are pleased that more Japanese investors are studying Sri Lanka's business climate.

There are opportunities for Japanese investors in many avenues here including value addition in sectors such as mineral sands, for which I invite Japanese investors to partner us and use our FTAs with India and Pakistan to access their huge markets."

Ishige also raised some issues faced by Japanese investors in Sri Lanka, specifically the cost of production for Japanese investors due to the increase in the electricity tariff.

Minister Bathiudeen said when the Sampur coal power plant goes into production and the third phase of the Norchcholai coal power plant would help reduce electricity rates.