As YoY bilateral trade jumped by 59%, Sri Lanka, looking to boost its trade with the fifth largest ASEAN nation, called for reactivation of its 1980 landmark agreement.
“We have no doubts that the Philippines could become a key East Asian trade partner for us. It is here that I believe that we need to jointly re-activate the landmark 1980 Trade Agreement between both countries,” said Minister of Industry and Commerce of Sri Lanka Rishad Bathiudeen, addressing the 41st Philippine Business Conference and Exposition held in Pasaya City, the Philippines on 26 October. Joining him from Sri Lanka was a 14 member Lankan business delegation from 11 Lankan firms in sectors of packaging, aviation, shipping, travel, engineering, tea and construction.
“A proud founder member of ASEAN in 1967, the Philippines today has become a key manufacturing hub in Asia. We are also pleased to note of Manila’s growth as a prominent outsourcing destination in Asia. As a South Asian growth economy and as a recent entrant to the lower middle income ranks the ‘Social Market Economic Model’ as envisioned by the new unity government led by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, is to focus on Sri Lanka’s next stage of economic development.
“Accordingly, Sri Lanka is to rapidly develop through new industrial development projects and economic reforms based on ‘Social Market Economic Model’. To accelerate our GDP growth further, through ‘Social Market Economic Model’ the new unity government is planning to introduce major reforms across many sectors. The creation of 45 economic development zones, 11 industrial and technical zones, 2 tourism zones, 23 agricultural zones, 10 fisheries development zones and 2,500 market-centred cluster villages are some of the planned initiatives by the new unity government.
“Creation of 34 investment promotion zones where international investors including investors from the Philippines can invest is a key effort to enhance our global market presence and competitiveness. Trade promotion with key markets as well as Asian tiger economies such as the Philippines is another plan to enhance our competitive advantage. Therefore we have no doubts that the Philippines also could become a key East Asian trade partner for us,” said Minister Bathiudeen.
“It is here that I believe that we need to jointly re-activate the landmark 1980 Trade Agreement between both countries which we believe to be a promising way to take our bilateral trade to the next levels. In Year 2000 bilateral communications on cooperation based on the 1980 landmark agreement commenced along with a process for a new Double Taxation Avoidance Agreement between the two countries, but then slowed down. Though our bilateral trade remains at modest levels of $ 64 million continuous trade increase over the years is a clearly visible trend.
“As the Industry Minister of Sri Lanka, I am also pleased to inform you that Sri Lanka is ready to leverage lessons from the Philippines of, how it became a newly industrialised country. Since the Philippines is the world’s largest producer of coconuts and coconuts are also among top traditional exports of Sri Lanka, bilateral cooperation possibilities are available here as well. There are many opportunities for the Philippines investors for trade and investment, in Sri Lanka through the Indo-Sri Lanka Free Trade Agreement and Pakistan-Sri Lanka Free Trade Agreement.
“Today I invite the keen Philippines manufacturers and investors, aiming to move into South Asia, to partner with Sri Lanka and make use of export opportunities to India and Pakistan’s 1.3 billion market. I wish to stress that Philippine investors’ investments in Sri Lanka are protected with a constitutional guarantee. Therefore you have almost no risk in recovering your investments when you invest with us. Also the proposed Double Taxation Avoidance Agreement between the Philippines and Sri Lanka reduces bilateral trade costs at both sides and a great investment incentive,” he added.
According to the Department of Commerce of Sri Lanka, bilateral trade between both countries have been on the up-trend. In the five year period of 2010-2014 there has been a 225% bilateral trade increase between Sri Lanka and the Philippines. Even 2014’s $ 64 million trade was a YoY increase of a huge 59% from previous 2013’s $ 40 million. Printing materials are leading exports of Sri Lanka to the Philippines while malts and wood charcoal are top imports from the Philippines to Sri Lanka.