At a Conference sponsored by the Institute for International Economics (IIE) titled "Free Trade Agreements and US Policy" Ambassador Robert Zoellick, United States Trade Representative (USTR) mentioned Sri Lanka as a potential candidate for a FTA with the United States.

He stated that the Bush administration will accelerate its bilateral and small country/regional approach to liberalise global trade, especially if the WTO "Doha Development Round" talks stall. He mentioned ASEAN countries as a possibility and also identified the Middle East, the Dominican Republic and Columbia as potential candidates. This statement follows the signing of the first FTA with an Asian country when Prime Minister Goh and President Bush signed the US-Singapore FTA in Washington, D.C. on May 6, 2003. Following Zoellick's comments President Bush offered on Friday May 9, 2003 a US-Middle East Free Trade Area by 2013 as an economic incentive to that region.

Ambassador Zoellick elaborated that four key criteria are being used to identify candidates for potential US FTA's- 1. progress on economic reforms 2. support for US positions in global trade negotiations including the Doha Round 3. support for US foreign policy objectives, 4. impact of a FTA on overall regional integration.

"The mentioning of Sri Lanka as a potential candidate is significant in that this is the first indication for a FTA in South Asia. With 41% of our exports (primarily apparel and garments) worth US$2 billion destined to the US market, this is very significant for our industry" said Sri Lanka's Ambassador to the United States, Devinda R. Subasinghe. "This is the outcome of significant progress made within the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) signed during Prime Minister Ranil Wickremesinghe's visit to Washington to meet with President Bush in July 2002."

Meetings of the US-Sri Lanka Joint Council were held in Colombo in November 2002 and in Washington in March 2003 co-chaired by Deputy United States Trade Representative Amb. Jon Huntsman and Minister of Commerce and Consumer Affairs, Hon. Ravi Karunanayake with the participation of Minister of Enterprise Development, Industrial Policy and Investment Promotion and Constitutional Affairs, Prof. G. L Peiris. Council meetings have advanced significantly trade, commerce and investment relationships between the two countries. Avenues for greater market access, including a possible FTA were discussed at these meetings. The recent award of a 100 mw power plant to a US corporation, Caterpillar Power was an outcome of the TIFA process.

Minister of Economic Reform, Science and Technology Hon. Milinda Moragoda met with Ambassador Zoellick during his visit to Washington to co-chair the April 14 US-hosted Pre-Tokyo Seminar. Minister Moragoda used this opportunity to discuss ways to build on the success of the TIFA process and to move forward towards an FTA.

"The importance attached to the US-Sri Lanka political and economic relationships indicates that the US takes the economic relationship very seriously and Ambassador Zoellick's statement clears the way for the government and industry to realize the potential of Sri Lanka's candidacy" said Ambassador Devinda R. Subasinghe.

Embassy of Sri Lanka
Washington DC
USA

10 May 2003