Dow Jones Newswires
Sri Lanka, US Free Trade Pact Uncertain - Ambassador
By Zaithoon Bin Ahamed, Dow Jones Newswires
10 January 2006
COLOMBO -(Dow Jones)- A free trade agreement between Sri Lanka and the U.S. isn’t a certainty and even if it does happen, it isn’t guaranteed to solve the country’s trade difficulties, the U.S. ambassador to Sri Lanka said Tuesday.
"I would not bank on the FTA as a solution right now. The U.S. has a full platter of trade negotiations going on. There is a chance, but not a great chance," U.S. Ambassador Jeffrey Lunstead told a business meeting.
The U.S. Congress may not see any benefits in signing an FTA with Sri Lanka, he said.
For now, the nation should focus on reviving the stalled peace process with Tamil Tiger rebels, Lunstead said. Sri Lanka should also explore other opportunities and reduce its dependance on trade concessions, he said.
Sri Lanka and the U.S. signed a Trade and Investment Framework Agreement in July 2002, which provided a forum to discuss bilateral trade and investment issues.
But political volatility in Sri Lanka, including a contentious election in 2004, has stalled efforts to strike an FTA with the U.S.
Sri Lanka was hoping to obtain some concessions from the U.S. for its textile and garments trade, which account for over 50% of the country’s total export earnings.
The U.S. is Sri Lanka’s largest export market, accounting for roughly 40% of the country’s overseas sales and over 50% of Sri Lanka’s total garment and apparel exports.
The Sri Lankan government has said that an FTA with the U.S. would allow the island to obtain some tariff concessions on its garment exports after losing its guaranteed market-share quota under the now-defunct Multi-Fiber Agreement, which expired in 2004.
Edited by Michael Kitchen