by Sanath Nanayakkare

Sri Lanka should give a ‘horizon’ to its businesses and potential investors as to until when the import ban will be in place, Denis Chaibi, ambassador/ Delegation of the European Union to Sri Lanka and Maldives said at the official launch of the Sri Lanka Trade Information Portal (SLTIP), held at Shangri La Colombo recently.

The 4-year EU funded project worth EUR 8 million supports local SMEs’ export competitiveness in regional and EU markets as well as value addition in sectors with high potential for economic growth and development.

Excerpts from ambassador Chaibi’s speech:

“This project is a good indication of our overall relationship which is characterised by engagement, respect and results. This project sends three powerful messages. The first one is about the importance of the EU market to Sri Lanka and vice versa. The EU is the second export market for Sri Lanka just after the US”.

“If you take the EU’s trade figures with Sri Lanka in 2019 and if you add services and the EU tourists who came to the island – hopefully who will return soon – you can see the importance of the EU”.

“Further the return of GSP in 2017 was a significant development that led to more than a quarter’s increase of exports from Sri Lanka to the EU. It’s not only the biggest market in terms of quantity. But it’s also an important market in terms of quality”.

“I have been in Sri Lanka a bit more than a year and the thing that strikes me every day is the quality of Sri Lankan products. If you compare the cinnamon, it’s the best in the world. Sri Lankan coconut is the best in the world. Jack fruit is the best in the world. Tea is the best in the world. Who appreciates the best in the world products more than Europeans? Who has the refinement that Sri Lanka has which is only found in civilizations. The Europeans are ready to pay a premium for all these products. Perhaps the South Americans will pay a bit more for Sri Lankan cinnamon, but at the end of the day those who buy the most refined Sri Lankan products are mostly Europeans. We are not only a quantitative market but a qualitative market with a huge potential for the future. The best way for Sri Lanka is to increase its product-quality, and quality is where Europe will be there as a very happy customer.”

“But we are a very demanding market. We have a lot of barriers and those have to do with qualitative standards. In the future, I can imagine that Sri Lankans will want to sell directly to Europeans through online websites. When Sri Lanka exports to Europe, it is ready to export to anywhere else in the world because the European standards are high. We are a demanding market but we are happy to be a good market for Sri Lanka because Sri Lankan products are the best.”

“My second message is that markets and trade is not a one-way street. We have full consideration for the public finances situation in Sri Lanka We fully understand the measures that have been introduced to safeguard public finances and especially the foreign exchange reserves of Sri Lanka.”

“But we need three things. We need recognition notification in the horizon. We need recognition that there is an import ban. And sometimes we are told that there is no import ban but just impediment for the banks to pay in foreign currencies, but these payments are linked to products, so we have to recognize that they are trade restrictions. And then on that recognition, we can quantify that to the WTO and work together in the international organisation that is precisely set up to deal with this kind of issues.”

“I think Sri Lanka would benefit tremendously from giving a horizon to its businesses and potential investors as to until when the measures will be in place so that people can prepare and also can invest in Sri Lanka.”

“That is important if we want to attract foreign direct investments to Sri Lanka. We need to have certainty and we need to be able to export [raw materials].Who would invest in Sri Lanka not knowing if he or she will be able to export because they know that the trade restrictions may attract some reaction. So, in order to attract foreign direct investments, we have to give a horizon on the trade restrictions. We say this in full respect of whatever the Sri Lankan government decides.”

“My third point is; if you look at this project of EU-Sri Lanka Trade Related Assistance, it is in full respect of the government’s priorities. We don’t have an agenda. We are not a military super power. We are a standards super power, and a lifestyle superpower. We live very well in Europe and we live very well for many reasons. But when it comes to aid and support what we do is follow the priorities of the government. Before we take policy decisions and priorities we always look at the manifesto. I was at the Sri Lanka National Day events and its manifesto specifically dealt with agriculture. Agriculture is the sector that we have favoured in our last budget cycle. So from 2014 to 2020, we have invested more than half of the EU aid in the development of rural Sri Lanka. We have spent almost EUR 100 million in that sector. This shows that we are following priorities of the government and that’s why we are supporting this project so that we in Europe can enjoy more of the best Sri Lankan products and Sri Lankan exporters can create more added value by collaborating with Europeans.”