SL to increase export revenues need to diversify its exports and markets

At the first National Symposium to develop a National Export Strategy, which is part of the EU-Sri Lanka Trade-related Project, the European Union’s envoy to Sri Lanka Ambassador Tung-Lač Margue said that economic growth through trade liberalization requires increased export competitiveness and Sri Lanka’s export product basket has not changed much since the 1990s while its global market share has fallen.

He said that if Sri Lanka aims to substantially increase its export revenues as it wishes diversifying to new sectors is the key to success. Similarly, diversification of markets is also a priority for Sri Lanka,

The EU Ambassador emphasized that diversification is a key to Sri Lanka’s export success. He pointed out that in 2016 half of Sri Lanka’s total revenues of US$ 10 billion were from the textile and garments sector and this ratio has remained the same for several years.

Although the government wishes to double its current exports of slightly over US$ 10 billion in the medium/long term, only about 5 percent of existing local companies engage in exports and exports in 2016 remain stagnant compared to 2015.

While the UK is currently an important market for Sri Lanka, with Brexit becoming a reality Sri Lanka will immensely benefit if it also focusses its attention especially on accessing non-traditional markets among the EU countries. This will not only cushion the potential negative impact of Brexit on Sri Lanka but will also help contribute towards Sri Lanka’s ambitious target of doubling its exports revenue, Margue said.

The envoy mentioned that the EU as a long-standing friend of Sri Lanka continues to work very closely with the Government on many trade related issues which have already brought about tangible results.

Speaking about Sri Lanka regaining the GSP+ facility, Ambassador Margue said that if utilized creatively, GSP+ has the potential to benefit the country far beyond zero duty access to the EU.

He explained that the rules of origin criteria that needs to be complied with to qualify for GSP+ requires that majority of the raw material and other inputs need to be of local origin thereby giving opportunities for new companies to become suppliers to the existing manufacturing businesses, or encouraging manufacturers to engage in backward integration, spurring more economic activity and creation of jobs in Sri Lanka.

The country will also be able to attract foreign investors to set up manufacturing operations in order to export to the EU and benefit from zero duty access.

He said the Trade Related Assistance Project is another example of how a new and dynamic partnership between EU and Sri Lanka is evolving.

The EU Ambassador assured that they are here for the long haul, and they will continue to be here as an active development and business partner, to share their experiences, knowledge and values in supporting the economy to better integrate with the world economy.

The project to design a National Export Strategy for Sri Lanka is funded through the EU-Sri Lanka Trade Related Assistance project – an 8 million Euro project that is the result of a request made by the Sri Lankan Government, at the EU-Sri Lanka Joint Commission in Brussels.

Through this project, the EU aims to support Sri Lanka’s economic growth by launching a series of initiatives which includes support to design and implement a coherent trade strategy for export competitiveness, support for trade policy development and regulatory reforms, enhancement of Sri Lanka’s WTO trade negotiations capacity, support Sri Lanka’s regional integration process and help Sri Lanka maximize the use of the EU GSP+ scheme when it is granted. The project also expects to enhance Sri Lanka’s efficiency with cross-border procedures and help SMEs to increase their exports to SAARC and EU markets.