Exporters should exploit FTAs more to promote trade

by Lalin Fernandopulle

Sri Lanka's import export trade gap with India and Pakistan has widened over the years due to excessive dependence on imports. Policy makers should look at ways and means of bridging the gap by promoting more exports using the incentives granted under the FTAs to enhance trade and investment, said Executive Director, BOI, Dr. Nihal Samarappuli.

He was addressing a seminar on 'Export Opportunities to India, Pakistan and EU' organised by the Ceylon National Chamber of Industries (CNCI) in Colombo on Tuesday.

Dr. Samarappuli said "our exporters have not made good use of the concessions granted through FTAs signed with India and Pakistan to promote trade". When exporting to the EU countries exporters should ensure quality and safety of products. The EU legislature requires all exporters to have HACCP certification guaranteeing quality and safety of products.

The export sector should ensure good governance, maintenance of Human Rights and environmental protection to reap the full benefits of the EU GSP Plus scheme granted for three years.

The GSP Plus scheme which was introduced in July 2005 with duty free concessions for over 7,000 export items will end on December 31, 2008.

Market access, population, economic growth, growing middle class, changing consumer habits in India and Pakistan should be exploited to promote trade, he said.

Sugar confectionery, cocoa preparations, rubber and coconut based products, plastics and leather products, spices, footwear, ceramics, electronics, precious stones and jewellery, processed meat, fish, vegetables, automobile and spare parts and furniture are some of the potential sectors for trade and investment, Dr. Samarappuli said.

Around 4,232 products are granted zero duty under the Indo-Lanka FTA and 206 under the Sri Lanka-Pakistan Agreement. The FTA with Pakistan granted a 34 percent immediate tariff reduction for 4,481 products phasing out the zero duty by 2008.

Executive Director, National Council for Economic Development, Rohantha Athukorala said relations between buyers and sellers depend a lot in driving export growth.

Depending on the concessions granted in FTAs alone will not help develop trade and investment. They are only incentives for exporters to enter the market. Effective marketing strategies are vital to penetrate competitive markets, he said.

KIK Group Chairman, Lalith Kahatapitiya said that manufacturers should tap overseas markets and exploit opportunities to develop trade instead of depending on a smaller local market.

The country's export sector has been stagnant over the years due to its dependence on imports.

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