Business

How Vietnam turned FTAs into apparel growth and what Sri Lanka can learn

Published

1 month ago

2026/05/12

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.

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Business

Pelwatte Dairy commissions Sri Lanka’s largest dairy effluent treatment plant to advance ESG leadership and global market readiness

Published

8 hours ago

2026/06/18

Sahan Weerasooriya

Akmal Wickramanayake, Managing Director of Pelwatte Dairy Industries Limited, unveils the commemorative plaque to officially inaugurate the company’s Effluent Treatment Plant (ETP) at its Buttala manufacturing facility, reaffirming Pelwatte Dairy’s commitment to environmental stewardship, ESG compliance, and sustainable dairy processing.

Pelwatte Dairy Industries Limited has successfully commissioned its state-of-the-art Effluent Treatment Plant (ETP) at its Buttala manufacturing facility, marking a significant milestone in the company’s journey toward environmental stewardship, ESG compliance, and responsible dairy processing.

This facility is the largest Effluent Treatment Plant within a dairy processing operation in Sri Lanka, underscoring Pelwatte Dairy’s commitment to aligning its operations with global environmental standards and strengthening its position in international markets.

Strategic Commitment to ESG and Responsible Growth

This investment reflects a deliberate and forward-looking strategy by the Board of Directors to embed Environmental, Social, and Governance (ESG) principles into core operations. As Pelwatte Dairy continues to scale its processing capacity and expand its export footprint, environmental compliance has become a central pillar of sustainable growth.

The ETP has been designed to meet the increasingly stringent environmental expectations of Western, European, and Far Eastern markets, where compliance with wastewater discharge standards, environmental reporting, and sustainability practices are essential for market access.

Future-Proofed Design for Scalable Growth

The facility has a base treatment capacity of 250 m³ per day, with the engineered capability to handle peak volumes of up to 325 m³, representing approximately 30% additional capacity to accommodate future growth in processing volumes. [ETP Opening | Word]

This future-ready design ensures that Pelwatte Dairy can maintain consistent environmental performance even under high production scenarios, reinforcing the company’s commitment to long-term compliance, operational resilience, and responsible expansion.

Advanced Technology Supporting Global Compliance

The ETP integrates advanced treatment technologies, including:

Integrated Dissolved Air Flotation (IDAF)

Anaerobic and Enhanced Sequential Batch Reactor (AnSBR/eSBR) systems

Dedicated CIP wastewater management

Real-time automated process monitoring

Screw press sludge dewatering

These systems ensure high treatment efficiency and compliance with critical environmental parameters such as Biological Oxygen Demand (BOD), Chemical Oxygen Demand (COD), and nutrient discharge limits.

The plant is fully aligned with Sri Lanka’s stringent Central Environmental Authority (CEA) discharge standards and supports adherence to ISO 14001 Environmental Management System (EMS) practices, reinforcing Pelwatte Dairy’s structured approach to environmental management and continuous improvement.

Regulatory Engagement and Endorsement

The inauguration ceremony was attended by distinguished representatives from the Board of Investment (BOI) Environmental Division and Central Environmental Authority (CEA) provincial and district offices, reflecting strong regulatory engagement and endorsement of the environmental standards achieved through this investment.

Their presence underscores Pelwatte Dairy’s proactive approach in working closely with regulatory authorities to ensure compliance with national environmental frameworks while aligning with global best practices.

Enhancing Global Credibility of Sri Lankan Dairy

With this development, Pelwatte Dairy strengthens its position as a responsible and globally competitive dairy processor, capable of meeting the environmental expectations of leading international buyers and regulatory bodies.

This initiative not only enhances the company’s ESG profile but also contributes to elevating the sustainability standards of Sri Lanka’s dairy industry.

Acknowledgements

Pelwatte Dairy extends its sincere appreciation to its project team, operational staff, consultants, regulatory authorities, and partners for their contributions. Special recognition is extended to Industrial Solutions Lanka (Pvt) Limited for their engineering expertise and successful project delivery.

Business

Port City Colombo Forum in Dubai positions Sri Lanka as South Asia’s gateway for UAE business expansion

Published

8 hours ago

2026/06/18

Sahan Weerasooriya

Prof. Arusha Cooray, Ambassador of Sri Lanka to the United Arab Emirates

Exclusive invitation-only engagement at the Ritz-Carlton DIFC brought together approximately 200 senior UAE business and diplomatic leaders to explore Sri Lanka’s role as a platform for regional growth

The Embassy of Sri Lanka in the United Arab Emirates and the Consulate General of Sri Lanka in Dubai and the Northern Emirates, in collaboration with Colombo Port City Economic Commission and CHEC Port City Colombo Pvt. Ltd., hosted Globalisation and the Sri Lankan Opportunity – From Recovery to Relevance: Sri Lanka’s Moment in the Evolving Global and Regional Economy, an invitation-only diplomatic and investment engagement at The Ritz-Carlton, Dubai International Financial Centre.

The forum brought together approximately 200 senior leaders from across UAE corporates and business chambers alongside Sri Lanka’s most senior diplomatic and investment representatives – among them senior executives from Sobha Realty, Binghatti, Oracle, Emirates Airlines, First Abu Dhabi Bank, JLL, Cushman & Wakefield, CBRE, IFS, Danube and Samana Developers – reflecting the depth of interest from the UAE’s leading industries in Sri Lanka’s evolving economic proposition.

Opening the forum, Prof. Arusha Cooray, Ambassador of Sri Lanka to the United Arab Emirates, set the tone for a morning of substantive dialogue, speaking to the depth and durability of the UAE–Sri Lanka partnership, one built on decades of trade, people, and shared economic ambition, and affirming Sri Lanka’s commitment to taking that relationship into a new chapter defined by what Sri Lanka can offer UAE businesses seeking to grow their presence across South Asia.

The keynote address was delivered by Ghanim Al Falasi, CEO of Falak Tayyeb Platinum and Senior Vice President/Director General’s Office for of Dubai Silicon Oasis (DSO), who drew on over a decade of senior leadership experience in the UAE’s innovation and technology ecosystem to frame the question of what South Asia’s emerging platforms offer to forward-looking UAE businesses. He noted that while Dubai provides global access to capital and logistics, Colombo offers strategic access to South Asia, and that together the two cities can function as complementary platforms serving different but mutually reinforcing roles in the regional economy.

Business

The Ceylon Chamber of Commerce to hold 187th AGM

Published

8 hours ago

2026/06/18

Sahan Weerasooriya

The Ceylon Chamber of Commerce will convene its 187th Annual General Meeting on Thursday, 25th June 2026, at 5.30 PM at The Forum, Cinnamon Life.

This year’s gathering welcomes His Excellency Andrew Patrick, High Commissioner of the United Kingdom to Sri Lanka, as Chief Guest, who will deliver the keynote address. His presence reflects the close and longstanding ties between Sri Lanka and the United Kingdom, and is especially fitting at a juncture when strengthening trade ties, investor confidence, and sustained economic reform remain front of mind for the nation’s business community.

Chairperson of the Ceylon Chamber, Krishan Balendra, will also address the audience, reflecting on a year of progress and setting out the priorities ahead. His remarks will provide an overview of the Ceylon Chamber’s continued push to sharpen private sector competitiveness, drive evidence-based policy advocacy, and anchor long-term economic stability.

Following the formal proceedings, members and guests are invited to a networking reception.

Ceylon Chamber members wishing to attend may register by contacting Alikie at alikie@chamber.lk / 9411 558 8805.