Brexit impact still not seen by local trade, tourism sectors

The impact of Brexit on Sri Lanka is yet to be seen as a two-year window has been given for other countries to adopt to the changes of Britain’s exit from the European Union, trade and tourism experts said.

Chairman, Jetwing Hotels, Hiran Cooray said it is premature to predict the possible implication of Britain’s exit from the EU.

Currently there is no impact of Brexit on the tourism industry in Sri Lanka and there will not be a major impact in the future.

A referendum held on June 23 decided that Briatin should leave the EU with a 52 percent vote for ‘Leave’ against 48 percent to Remain. The EU involving 28 European countries has evolved to be a ‘single market’ enabling the movement of goods and people as if the member states were one country.

The Euro is used by 19 member states. For the UK to exit UE it has to invoke Article 50 of the Lisbon Treaty which gives the two sides two years to agree on the terms of the split.

Chairman, Heladiv Group, Rohan Fernando said Sri Lanka should renegotiate with UK and EU to form strong trade agreements during the two-year period given to UK to negotiate terms with EU. The government should come up with a solid plan to enter into fresh agreements with the EU and the UK.

Former Chairman, EDB and Sri Lanka Tourism, Dr. Rohantha Athukorala said in today’s global political economy there will be changes and alignments to trade agreements. “In the case of Brexit, we have a two-year window to fashion ourselves to this change with a Preferential Trade agreement with the UK that can be far better than the current arrangement.”

CEO, Shippers’ Academy Colombo, Rohan Masakorala said it seems the new British government will not act fast on Article 50 of the Lisbon Treaty which means trade negotiations and THE exit mechanism will not be known for some time,

There will be changes to the movement of people, capital and trade, trade and services following the negotiations between the UK and EU. Market volatility and currency volatility with the Pound losing 10% against USD have been a concern for trade partners of UK. This will have export-import pricing issues and impact inbound and outbound tourism until there are clear signals.

A major concern is that Brexit will be a drag on EU recovery, an uncertainty which may have an impact on how trade between EU and the UK would be in the future and the kind of trade deals which developing countries will have to work out with the UK.

The freight market will depend on global trade patterns and supply and demand of ships.

Executive Director, Global Seafood (Pvt) Ltd., and spokesperson, Seafood Exporters’ Association, Sri Lanka, Colonel C. Weeratunga said there is no immediate impact of the Brexit on seafood exports.

“However our concern is the depreciation of the UK Pound against the Dollar which will have an impact on export earnings.

There will be some impact on the buying power of importers in the UK but it will not diminish the demand for fish from Sri Lanka. There is a big demand for our tuna in Europe,” he said.

- LF