In the past fifteen years, Vietnam has become a prime example of how trade policy can drive industrial growth, particularly in the apparel sector. This transformation is the result of a strategic focus on Free Trade Agreements (FTAs), export-oriented manufacturing, and integration into global value chains. Sri Lanka can draw valuable insights from Vietnam’s experience, adapting them to its unique context.

Vietnam’s progress becomes even clearer when viewed against Sri Lanka’s current trade profile. Over the past several decades, Vietnam has used trade policy as a deliberate growth tool, implementing 19 bilateral and multilateral FTAs that cover around 60 economies. This has helped deepen its trade openness from 19% of GDP in 1988 to 184% in 2022. Trade openness measures the value of a country’s international trade as a share of GDP, and a higher ratio generally reflects stronger integration with global markets. By comparison, Sri Lanka’s trade openness is estimated at around 50% to 55%, indicating that international trade plays a smaller role in the economy and reflecting the country’s more inward-looking growth pattern.

Vietnam’s FTA network includes major agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP), and bilateral agreements with markets such as the UK, Israel, and the UAE. Collectively, these agreements give Vietnam access to key markets including the EU, UK, Japan, Canada, Australia, China, South Korea, and ASEAN countries, covering a major share of global GDP. This wide market access has strengthened Vietnam’s position as a reliable global sourcing hub. As a result, Vietnam’s apparel exports are projected to reach USD 46 billion by 2025, supported by a trade surplus of USD 21 billion. Its growth has also been reinforced by the “China+1” strategy, as global brands continue to diversify sourcing beyond China.

In the past 15 years, Vietnam’s apparel exports have grown from $13bn to $45bn an increase of 250%. By contrast, Sri Lanka’s apparel exports have grown just 58% from $3.4 to $5.4bn.

In order to successfully negotiate and implement these numerous trade agreements, Vietnam’s negotiation architecture is highly centralized, technically strong, and politically empowered.

The dedicated chief negotiator sits at deputyminister level, ensuring authority across ministries.

For major bilateral negotiations (e.g., with the U.S.), Vietnam forms specialized, multiministry teams led by a full minister.

This structure is one reason Vietnam has been able to negotiate 19 FTAs covering 60+ economies and integrate deeply into global value chains.

Like Sri Lanka, Vietnam exports some 40% of its apparel to the USA. Whilst neither country until recently had an FTA with the USA, in the wake of the USA Reciprocal Tariffs introduced in April 2025, Vietnam has now reached an agreement with the USA on tariffs ensuring that when the dust settles, Vietnam will have market access to the USA at concessionary tariff rates.

With Japan, another big market for apparel from Vietnam, there are not one, but three separate trade agreements between the two countries ensuring a free flow of trade between the two countries, including very significant investments from Japan into Vietnam from which this trade flows.

Similarly, whether its with the EU, the UK or South Korea all major markets for apparel from Vietnam, there are long standing trade agreements in place.

Sri Lanka’s apparel sector cannot merely replicate Vietnam’s success but can learn critical lessons. Market access through FTAs is only meaningful with consistent policies, investment readiness, and the capacity to respond to market demands. Effective use of FTAs requires firms to adapt their sourcing and compliance processes. Currently, Sri Lanka generates US 5 billion dollars in apparel exports and employs about 350,000 people, but to reach higher targets, it must improve its FTA strategy and make trade policies more accessible.

Strategic recommendations

To maximize the benefits of FTAs, Sri Lanka should focus on

Sri Lanka needs to have a full time dedicated resource for identification and negotiation of FTAs.

FTAs need to be done with markets that can drive strategic investments into the country, and act a market for Sri Lanka’s export basket.

Vietnam’s experience demonstrates that aligning trade access, investment, infrastructure, skills, and sustainability strengthens positions in global supply chains. Sri Lanka has the potential to become a higher-value, ethical apparel partner, but it must strategically leverage FTAs and enhance competitiveness. As the Joint Apparel Association Forum (JAAF) and the apparel sector plan their future, adopting a national approach that recognizes the industry’s growth potential is crucial. The challenge lies in creating the conditions for the sector to thrive in its next phase.

CSE activities yesterday were not very strong due to the absence of progress in the US-Iran peace deal, market analysts said.

Owing to that both indices moved downwards. The All Share Price Index went down by 57.96 points, while the S and P SL20 declined by 25.77 points.

Turnover stood at Rs 4.92 billion with five major crossings. Those crossings were; Seylan Bank 26.6 million shares crossed to the tune of Rs 2.76 billion; its shares traded at Rs 26.60, Ceylon Land and Equity 14 million shares crossed to the tune of Rs 154 million; its shares traded at Rs 11, Digital Mobility Solutions 330,000 shares crossed for Rs 54.1 million; its shares traded at Rs 164, Sampath Bank 250,000 shares crossed for Rs 37 million; its shares sold at Rs 149.75 and JKH 1 million shares crossed for Rs 20.6 million; its shares traded at Rs 20.60.

In the retail market top seven companies that mainly contributed to the turnover were; Digital Mobility Solutions Rs 119 million (725,000 shares traded), Commercial Bank Rs 74.5 million (355,000 shares traded), Colombo Dockyard Rs 58.8 million (413,000 shares traded), Ceylon Grain Elevators Rs 53 million (110,000 shares traded), CIC Holdings (Non-Voting) Rs 45.3 million (1.6 million shares traded), CIC Holdings Rs 43.9 million (1.3 million shares traded) and JAT Holdings Rs 43.5 million (one million shares traded). During the day 185 million share volumes changed hands in 27859 transactions.

It is said that the banking sector counters led the market, especially with the Seylan Bank crossing, which contributed more than half to the day’s turnover. Further, manufacturing sector counters, especially JKH, also performed well.

Hikkaduwa Beach Resorts said it has temporarily shut down operations for refurbishment and operational improvements within the property. The stock was down 1.61 percent at Rs 6.10.

Yesterday the rupee was quoted at Rs 321.40/90 to the US dollar in the spot market, from Rs 321.70/90 on Friday, dealers said, while bond yields were broadly steady.

A bond maturing on 15.12.2028 was quoted at 9.75/85 percent.

A bond maturing on 15.10.2029 was quoted at 9.90/10.00 percent.

A bond maturing on 01.07.2030 was quoted at 10.10/15 percent, up from 10.05/15 percent.

A bond maturing on 15.03.2031 was quoted at 10.15/25 percent.

A bond maturing on 15.12.2032 was quoted at 10.70/80 percent.

A bond maturing on 01.11.2033 was quoted at 10.90/11.05 percent.

The telegraphic transfer rates for the American dollar were 318.3000 buying, 325.3000 selling; the British pound was 431.7273 buying, and 443.1725 selling, and the euro was 372.0629 buying, 383.6027 selling.

By Hiran H Senewiratne

China which has never maintained colonies is one of the permanent members of the United Nations Security Council (UNSC). Among other members (i.e. USA, UK, France and Russia) it is the only one to practice one country many systems of government. The Global Security Initiative (GSI) China proposed in April 2022 focused on resolving and preventing global conflicts addressing the root causes to strengthen global security governance. By 2026 (4 years later) the GSI is quoted in more than 140 internationally acknowledged inter/ intra state documents and endorsed by more than 130 countries and international organizations (Ref. Media). Especially in the present context where military might is irresponsibly used in anti human ways, China’s GSI is being referred by nearly 75% of the global community as a stabilizing force which stresses peaceful dialogues and win-win cooperation.

The unprecedented need

Peace loving majority may still question the real objectives of the ‘Arab Spring’ which took place more than 15 years ago. It was an era which strategic human resource management was used to de-establish many stable Arab states such as Egypt, Libya & Iraq etc. especially using online tools. It may have been to obstruct the birth of new economic powers. It’s not clear why Iran was spared then but with the latest developments GSI seems to be the global majority’s obvious choice to ensure global security stability. It promotes sustainable security and a comprehensive common vision with multilateralism as its core.

1. Upholding the UN’s central role

2. Promoting major-country coordination

3. Encouraging peaceful settlement

4. Tackling traditional/non-traditional threats

5. Strengthening global security governance

6. Actively participating in UN peacekeeping

7. Nuclear non-proliferation

8. Nuclear war prevention

9. Political settlement of regional hotspots

10. Counter-terrorism cooperation

11. Bio-security cooperation

12. Information/Cyber security

13. Artificial Intelligence (AI) governance.

14. Outer space security.

15. Maritime security

16. Food and energy security

17. Security cooperation with regional organizations

18. Protecting overseas interests

19. International policing cooperation

20. Capacity building (Ref. Chinese media)

Views expressed are personal/ Photo source www

By Prof. Samitha Hettige