The Ministry of
Foreign Affairs said the visit of US Assistant Secretary of State Alice Wells
and Sri Lankan Foreign Minister Dinesh Gunawardena had discussions on
economics, defence, maritime affairs and the US Indo Pacific Strategy.
"While
articulating the region's US strategic vision, Ambassador Wells conveyed the
United States ' keen desire to build a stronger rapport with Sri Lanka and
highlighted the importance that the US places on bilateral engagement,"
the statement said.
Wells had
previously said that the two countries planned to re-negotiate the Millennium
Challenge Corporation's $500 million awards, which caught in cross-fire during
a recent presidential election.
Minister
Gunawardena highlighted the need for greater market access for Sri Lankan
products and more significant investment in Sri Lanka while appreciating the US
grant assistance, "the foreign ministry said.
"It has
been agreed that the two sides are working together to increase foreign direct
investment between the US and Sri Lanka. Also, the US delegation was briefed on
developments in Sri Lanka and the renewed efforts in reconciliation and
development."
Data from the
Department of Commerce of Sri Lanka indicates that bilateral trade between the
two countries from 2012 to 2016 increased by 43% from USD 2.34 billion to USD
3.34 billion and 2016’s year-on-year bilateral trade with the US increased by
2.14% to USD 3.34 billion from 2015’s USD 3.27 billion.
The US
attributed to 27.5% of Sri Lanka’s 2016 total exports and US imports to Sri
Lanka for the same year accounted for 2.77% of the country’s total imports from
around the world. Data from the Department of Commerce of Sri Lanka indicates
that of 2016’s bilateral trade activities, US imports to Sri Lanka were 16%
amounting to USD 540 million, with Sri Lankan exports to the US making up 84%
amounting to USD 2.8 billion.
Sri Lanka’s
exports to the US surged by 33% from $ 2.11 billion in 2012 to $ 2.8 billion in
2016. In the same period, imports from the US to Sri Lanka rose by 130% to $
540 million. Sri Lanka’s leading exports to the US in 2016 were apparel,
clothing accessories and made up textile articles (all three totalling 11.5% of
overall exports), reliable, new and used tires (6%), followed by fish,
activated carbon and mineral, and cinnamon. Among the leading imports from the
US in 2016 were oil cakes (13%), optical and photographic (10%), plastics (5%),
medicaments (3%) and wheat and meslin (3%), etc.
OSL Take: Continuing
trade relations between the US and Sri Lanka is a positive as the US being a
consumer-driven will continue to demand imports from Sri Lanka which is an
export-reliant nation. The USD 480 MCC Compact is a grant instead of a loan
borrowed at a fixed/floating interest rate.
Further, it
places no economical strain on the state or taxpayers of Sri Lanka as such. The
MCC grant is a powerful sign of Sri Lanka's strong bilateral relations with the
US. The US continues to be Sri Lanka's growth partner and has also expanded to
the island nation the US GSP trade concession.
Furthermore, US
firms/investors could confidently explore possibilities in Sri Lanka and look
to form joint ventures with local firms due to the close links between the two
nations. Earlier this year, the MCC CEO- Sean Cairncross, has pledged that the
U.S. government agency is committed to implementing the U.S. $480 million grant
to mitigate transportation and land management problems influencing the
country's economy.
VBS/AT/20200311/Z_TB1
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