COLOMBO (EconomyNext) – Sri Lankan exporters are not making enough use of free trade agreements (FTAs) and should exploit them before the duty advantage is lost and diversify their products, a senior trade official said.
"Market access through preferential or zero duty is a temporary arrangement," Director General, Department of Commerce R D S Kumararatne declared at a forum Wednesday organised by the Ceylon Chamber of Commerce.
Speaking on the government’s strategy on accessing export markets and recent developments, he said Sri Lanka has two bilateral FTAs, with India and Pakistan, with a deal with China coming up.
"But the question is do we use the FTAs enough?" he asked.
Exporters should exploit available duty concessions under the free trade deals while they last as they could be lost if countries reduce import tariffs or give similar concessions to other exporting nations.
"So get the maximum out of existing FTAs," Kumaraatne said.
"In the long run, your sustainability in a market depends on how competitive you are, whether you can maintain productivity and offer a unique or differentiated product to the market."
Exporters should also not neglect to diversify their effort since many product lines available under FTAs and regional trade deals are not being used, he said.
Under the Asia-Pacific Trade Agreement Sri Lanka got a special opportunity to target two markets – South Korea and China.
"Sri Lankan exports increased substantially thanks to APTA which gives a 33-50 percent import duty cut for select products," Kumararatne said.
"Particularly coconut and rubber products benefitted from it. But the problem is there are many other products that could benefit but the question is whether we produce them.
"We have to diversify our product range. You must maximise access during the time concessions are available."