29 September 2009

Sri Lanka to Have Better Access to China under a Regional Trade Deal

28th September 2009, www.lankabusinessonline.com

Sri Lankan exporters will get better access to the Chinese market in a new round of talks under a regional trade deal scheduled for completion in October, officials said.

Sri Lanka will ask for more products to be covered in the fourth round of talks under the preferential trading arrangement, Asia-Pacific Trade Arrangement (APTA), previously called the Bangkok agreement.

Bandula Somasiri, deputy director of the Commerce Department, said Sri Lanka has got received expanded market access to China through concessionary import duties for 1,700 export products under APTA with the margin of preferential duty now 27 percent.

"In the fourth round of talks we've asked for more products. This is expected to rise to 2,000 product lines," he told a Sri Lanka-China business forum.

Saman Kelegama, executive director, Institute of Policy Studies, a think tank, said the fourth round of talks is scheduled for completion in October.

"The fourth round of negotiations aims to widen the coverage of preferences to at least 50 percent of the number of tariff lines and provide a tariff concession of at least 50 percent."

The fourth of talks will also extend to areas beyond the traditional tariff concessions in order to deepen co-operation and integration, such as removing non-tariff barriers that act as an impediment to trade ties between two countries, he told the forum.

Trade between Sri Lanka and China has been steadily increasing under the trade deal

"If you add Hong Kong to China's overall trade, you can see it has increased very significantly," said Kelegama.

"Together, they become the second largest source of imports to Sri Lanka after India That's the importance of our trade with China and Hong Kong."

The main Sri Lankan exports to China consist of raw coconut coir, apparel, tea, rubber and precious stones, and bicycles and other cycle products.

Sri Lanka's major imports from China are electrical machinery and equipment, boilers and machinery and parts, cotton, iron and steel, fibres and fabrics, fertiliser, railway locomotives and inorganic chemicals.

There has been a rapid increase in railway items and electrical machinery and textiles as well as fabric imports from China in recent years.

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