EU calls on Govt. to provide detailed outlook on trade related activities

By Charumini de Silva 

The European Union (EU) yesterday called on the Government to give a detailed outlook on trade related activities, asserting that market and trade is ‘not a one-way street’.

“We have full consideration for the public finances situation in Sri Lanka, which has been heavily impacted by the COVID-19. We fully understand and realise the measures that have been introduced to safeguard the public finances particularly the foreign exchange reserves of the country. However, we need three factors – recognition, notification and a horizon for trade related activities,” EU Ambassador for Sri Lanka Denis Chaibi said.

Speaking at the launch of the ‘Step-By-Step Trade Procedures Functionality’ of the Sri Lanka Trade Information Portal (SLTIP) yesterday with Trade Minister Bandula Gunawardena as the Chief Guest, Chaibi pointed out that the transparency in information related to trade would benefit the country in the path to recovery post-COVID, particularly to increase trade and attract foreign direct investments (FDIs).

“Sometimes, we are told there is no import ban, but just impediments from the banks to pay in foreign currencies. But these payments are linked to products and therefore we have to recognise that there are trade restrictions and then notify them to the World Trade Organisation (WTO) which is precisely set-up to deal with this kind of issues,” he said.

Chaibi was of the view that Sri Lanka will benefit tremendously by giving a right horizon to traders and potential investors regarding the measures in place as trade restrictions may attract some reaction.

“We need to have certainty to prepare and also invest. To attract FDIs, we have to give a horizon on the trade restrictions. This is very important if we want to attract FDIs,” he added. The Ambassador also said the best way for Sri Lanka to increase exports to the EU is through value added agriculture products, which are known for its high quality over the years. “Sri Lanka is known for its quality in the EU market. It has the best cinnamon, coconut, jack fruit and tea. Europe will be there for quality products as a very happy customer. Who appreciates these best in the world products other than the EU? For this refinement, the Europeans are ready to pay a premium price. We are not only a quantitative market, but a qualitative market,” he stressed. Highlighting the importance of the EU market for Sri Lanka, he said it is the second largest trading partner for Sri Lanka after the US. According to 2019 data, total trade between the EU – Sri Lanka was around 506 billion euros and US – Sri Lanka was around 509 billion euros. However, he said that if services and half of the tourists that travelled to Sri Lanka are counted, it would exceed the US numbers.

Chaibi also said the regain of the GSP+ in 2017 was a significant development that led to over a quarter of exports from Sri Lanka to the EU. “We are a very demanding market, but we also have strict procedures to maintain the quality and standards. So, when Sri Lanka is ready to export to Europe, it also means that it has high standards to export to any country in the world,” he added.

He said in future, there will be many Sri Lankans that want to sell directly to the European market via online and innovative shipping. Chaibi said the SLTIP have lined up 23 products to export from Sri Lanka and only six products from Europe, where majority of them are agricultural products keeping in line with the Government’s policies.

“Agriculture is the sector we have favoured in our last Budget cycles. From 2014 to 2020 we have invested more than half of the EU aid in rural development and it is almost 100 million euros (almost Rs. 230 billion) that was spent,” he said. The Ambassador said the competition of this project was an example of what the EU can achieve with Sri Lanka for the benefit of economic cooperation from Europe and Sri Lanka. “It is also a good indication of our overall relationship which is characterised by engagement, respect and results,” he added.

SLTIP is housed at the Department of Commerce (DoC) was initially carried out with the support of World Bank and Australia Aid. As a complement to the portal, International Trade Centre (ITC) with DoC embedded the step-by-step procedures functionality. The technical support for this was provided within the framework of the European Union (EU) – Sri Lanka Trade Related Assistance project implemented by the ITC and funded by the EU. “We don’t have an agenda and we are not a military super power, but we are a standard superpower and a lifestyle super power. We live very well in Europe and we live very well for many reasons. But when it comes to aid and support, what we do is follow the priorities of the Government,” Chaibi added.