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US Assistant Trade Representative for Central and South Asia Michael Delaney in Colombo yesterday
The US yesterday said it was happy with the latest Trade and Investment Framework Agreement (TIFA) talks with Sri Lanka and acknowledged post-war economic story was positive though growth could be accelerated with right policies.
“We had a very useful discussion with regard to finding pragmatic ways to boost bilateral trade and investment. Some issues were resolved and others were left for better understanding and additional time. Overall we are pretty happy,” US Assistant Trade Representative for Central and South Asia Michael Delaney told journalists yesterday after concluding the 11th TIFA talks between Sri Lanka and the US.
The TIFA is one of the primary mechanisms to discuss ways and resolve various issues towards boosting greater bilateral trade and investment. The US-Lanka TIFA was established in 2002.
Delaney, who met Government officials, business leaders as well as trade unions among others, acknowledged that post-war the economic story has been positive with “stronger economic growth.”
He noted that the conflict greatly limited Sri Lanka’s economic growth hence the recent rebound can be linked to the end of the conflict. “Sri Lanka’s growth has been stronger than rest of South Asia. We have witnessed a positive economic growth story. However there is considerable unrealised potential and a faster growth will depend on the right policy mix,” the veteran official counting over 30 years in USTR office said.
He said that higher level of Foreign Direct Investments (FDIs) can be achieved via “predictable, consistent and clear” policies as any serious investor will consider prospects on a long-term basis based on policy stability.
Though he met trade unions and the ILO, Delaney noted that some outstanding issues were discussed but overall Sri Lankan labour situation was satisfactory. Under the TIFA, a Labour Subcommittee met in Colombo on Tuesday as part of broader engagement where some of the recent developments as well as future reforms had been shared.
With regard to potential sectors which the US sees for greater involvement of American firms and collaborations, Delaney listed infrastructure, tourism, rail, sea and airports, and ICT/BPO.
“We have seen and are aware of an ambitious infrastructure development push in Sri Lanka. I believe US firms are well positioned to support this goal of Sri Lanka’s,” he added.
He also acknowledged that post-war tourism has picked up in Sri Lanka but noted considering the fact that prior to the war, Sri Lanka had higher arrivals than Thailand then, the future potential was greater hence must be tapped effectively.
In response to a journalists question whether the US has raised any concerns over the contentious Land Bill which impacts foreign companies, Delaney said he was aware about concerns by both foreign and local private sector.
“If the Government is determined to go ahead with the Bill, we would urge that the law be sufficiently flexible to accommodate special circumstances.”
“Sufficient flexibility will help Sri Lanka remaining an attractive FDI destination,” he added.
When asked whether testing times for US-Lanka political ties have impacted a greater bilateral economic and business engagement, Delaney opined “there was no direct evidence” to suggest same.
He noted that US-Lanka ties cannot be solely measured by the quantum of FDIs.
Being the largest buyer of Lankan apparel as well as the presence of plethora of US brands, the overall American profile with regard to the Sri Lankan economy is much larger, he said.
He also noted that Sri Lanka has both advantages (such as highly skilled and quality work force and better education) as well as disadvantages (small market) and these dynamics determine US FDIs. For example, even if Sri Lanka is successful the market size may not justify huge US investment. However, the right mix of policies and regulations will be useful.
In response to a question about how he would rate the progress of the SL-US TIFA engagement, Delaney said in terms of efficacy, Sri Lanka could be rated high in comparison to some of the other engagements within South and West Asia.
