Promoting trade between US and Sri Lanka:
Many challenges remain - AMCHAM
While expressing positive sentiment of better trade and investment
between Sri Lanka and the United States, a top official of the American
Chamber of Commerce (AMCHAM) underscored the importance of addressing
the tariff barriers that stifles the growth of trade and investment
between the two countries, at the US Trade Show 2015 in Colombo.
Sri Lanka and the United States are keen to boost trade and
investment with renewed interest. Relations between the two countries
took a new turn following the change of government in January this year.
However, many challenges remain in promoting trade and investment
between the two countries.
Trade has been in favour of the US with a deficit of US$ 1,888
million up to September this year. Exports amounted to US$ 292 million
and imports US$ 2,181 million.There is a considerable deficit in US
trade with Sri Lanka due to many challenges faced by US companies and
The complexity of the multitude of tariffs and taxes imposed on the
business community is one of the main barriers in addition to corruption
and lack of transparency of the regulatory system, which keeps investors
away from large projects and government procurement contracts, the
Chamber official said.Exports to the United States, Sri Lanka’s most
important single-country market, were estimated at $2.4 billion last
The United States is Sri Lanka’s biggest single-country market for
garments, accounting for around 40 percent of total garment exports. US
exports to Sri Lanka were estimated at $244 million last year,
consisting primarily of industrial machinery, medical instruments,
aircraft parts, lentils, paper, specialized fabrics and textiles for use
in the garment industry, fruits, and pharmaceuticals.
Stringent labour laws and policies in favour of the employee also
dampen business activities since its difficult to fire or lay off
workers for reasons other than well-established disciplinary issues. To
ease the business registration process many look forward to an online
facility. Prohibitions imposed on the purchase of land by foreign
nationals, foreign companies and companies incorporated in Sri Lanka in
addition to retrospective applicability of a number of other laws are
viewed as major barriers to trade in Sri Lanka by the US, an AMCHAM
US Ambassador to Sri Lanka, Atul Keshap said there is a new and
tremendous opportunity for the United States and Sri Lanka to enhance
economic ties and expand bilateral trade.
“US companies are some of the most dependable business partners,
producing quality products and services in the world,” Keshap said.
Deputy Foreign Minister Harsha de Silva said a free trade agreement
between Sri Lanka and the US is in the pipeline and added that
discussions between the two governments are continuing.
Sri Lanka should focus on preferential trade agreements and the
Transpacific Partnership Agreement (TPP) to expand trade.
Transportation, information technology, food preparation,
agriculture, cosmetics, logistics, machine tools, education and energy
are some of the major sectors represented at the show.