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THE US GOVERNMENT ASSURES CONTINUED TRADE PROCESS STARTED WITH FORMER UNP GOVT. AND ALLAYS FEARS THAT IT WOULD CANCEL TRADE AGREEMENTS WITH SRI LANKA

U.S. Trade Representative Robert Zoellick, right, meets with Sri Lanka's Minister of Trade, Commerce, and Consumer Affairs Jeyaraj Fernandopulle, left,on Monday, June 21, 2004, in Washington. (Photo by: /Evan Vucci)

By Walter Jayawardhana reporting from Los Angeles

June 24, 11.00 AM: The United States trade representative Robert B. Zoellick assured Sri Lanka’s visiting Minister of Trade, Commerce and Consumer Affairs Jeyaraj Fernandopulle that the US would continue the process of Trade and Investment Framework Agreement (TIFA), which it signed with the former Prime Minister Ranil Wickremesinghe, with President Kumaratunga’s government also to its fullest extent.

Trade Minister Fernandopulle said, that the United National Party had spread the story that the United States would cancel the agreement after the fall of the UNF government but the US Trade representative assured him that the US would continue with the process with Sri Lanka’s current administration.

Sri Lanka’s leading businessmen especially the ones involved in the apparel trade traveled with the trade minister to take part in varied discussions.

Minister Fernandopulle said the United States also would continue its process of its negotiations with Sri Lanka that would lead to the signing up of the US Free Trade Agreement with the Indian ocean republic that would increase the country’s gross national income by 3.5 % since it would eliminate the 5 to 30 per cent taxes imposed by the United States government currently on finished apparels and enable Sri Lanka to compete with larger producers like China in the US market in the apparel trade. The Minister said then there would be no US taxes on Sri Lankan exports.

Under the present quota system of apparels Sri Lanka exports apparels worth 1.7 billion US dollars, which amounts to 53 percent of the country’s, export earnings. Since the proposed Free Trade agreement would completely eliminate the current import taxes the agreement would increase the country’s gross national income by 3.5 percent, the Minister emphasized.

The United States is proposing to completely eliminate the quota system under which the giant economy imports apparels from third world countries from beginning of next year and import under new free trade agreements instead. Sri Lanka has projected that the new scheme would immensely help the country.

During the discussions Ambassador Zoellick said the US administration was keen to find out the new economic policies of the Kumaratunga administration. Minister Fernandopulle in response said, he was in Washington DC to reaffirm the new government’s commitment to economic reform and trade liberalization to uplift the rural economy of Sri Lanka and alleviate poverty in the whole country.

Fernandopulle and Zoellick agreed that the TIFA process should continue to deepen and broaden economic ties between Sri Lanka and the United States. In response to the request made by the Sri Lankan minister, the United States Trade representative agreed to hold the 4th meeting of the Joint Council under TIFA be held in October 2004. Zoellick suggested while the TIFA process continued to deal with business and investment issues to build confidence between the two countries, Sri Lanka also should review the Free Trade Agreements concluded by the US with its other trading partners to have an understanding of the extent of trade and investment liberalization envisaged in the US Free Trade agreements.

Minister Fernandopulle said that Sri Lanka would finalize the Free Trade Agreement in about 15 months.

The Sri Lanka minister also informed that the new government would enforce rigorous intellectual Property rights legislation and would take action to sign WTO information Technology agreement.

The Sri Lanka embassy in Washington DC said, “. Minister also met Hon. Alan Larson, Under Secretary of State for Economic, Business and Agricultural Affairs, Hon. Christina Rocca, Assistant Secretary of State for South Asian Affairs and had discussions on the peace process, utilization of the Millennium Challenge Account funds by Sri Lanka as beneficiary for FY 2004, food aid program implemented by the US Department of Agriculture and bilateral political and economic relations. He also met Representative Frank Pallone (Democrat-New Jersey), Co-Chair of the Sri Lanka Congressional Caucus.

“The Minister also addressed the US-Sri Lanka Working Group at the US Chamber of Commerce and presented the trade and economic policies of the new Government, the investment opportunities available in Sri Lanka for US investors and steps being taken by the government to restart the peace negotiations. The Hon. Minister highlighted the potential for bilateral trade to grow under a Sri Lanka-US FTA and thanked members of the US-Sri Lanka Working Group for supporting the proposed Sri Lanka-US FTA. Representatives of the major US companies who attended the meeting had an interaction with the Sri Lanka Business delegation that accompanied the Minister.

“The Sri Lanka business delegation comprised Chairman, Joint Apparel Association Forum, Managing Director, Mast Lanka/Brandix Apparel, Chairman, MAS Holdings Ltd., American Chamber of Commerce, Colombo, Director, Favourite Group, Chairman, Daya Group of Companies, CEO/Managing Director, Orit Apparels Lanka Pvt. Ltd. and Managing Director of Oryx Benoidar Ltd. The US Companies included PDI Program Development International, LLC, Caterpillar, Nathan Associates, American International Group Inc., Pillsbury Winthrop, LLP, The AES Corporation, Johnson & Johnson and Millennium Information Technologies.”

( go2lanka.com)