DESPITE new tariffs and talk of an
all-out dispute, a senior adviser to Sri Lanka's finance minister has
said that he isn't too worried.
Deshal de Mel, an economic advisor in the finance
ministry, said: "I don't
think there's a lot of probability being placed on the possibility of it going
into an out-and-out, global scale trade war. The rhetoric and the actuality in
terms of policy - there will probably be a fairly significant gap."
Far from obsessing about the
supposed death of the liberal trading order, Sri Lanka is striking deals on its
own. In January, it signed a free trade agreement with Singapore that includes
investment and services. And it's currently negotiating a trade pact with
China, its largest trading partner. Sri Lanka also hopes to conclude
negotiations on an expanded trade deal with its much larger neighbour India in
about a year's time, Mr de Mel said.
Sri Lanka's biggest trading partner
is China at US$4.5 billion, followed by India at $4.4 billion and the US at
$3.3 billion. Because the US is Sri Lanka's largest export market, mainly for
apparel, Washington runs a deficit of nearly $2.3 billion with Colombo,
according to Bloomberg data.
The one risk to Sri Lanka is that
the trade rhetoric hardens and the United States raises tariffs in other areas.
If the US raised tariffs on apparel, a key export for this South Asian nation,
that would be "problematic," Mr de Mel said.
If it continues expanding and
proliferating into other products, then certainly it could be of material
interest to Sri Lanka," he said, adding that's unlikely to happen. "Sri
Lanka's not expecting too much to see major challenges to our key globally
exported products right now."
Source : HKSG.
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