“FTAs a favourite but most dangerous topic”: Japan’s Ishige
Tuesday, 15 October 2013 00:05
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The possibility of a Sri Lanka-Japan FTA needs further study, before action.
“FTAs are a most favourite but a most dangerous topic for me! FTAs are a powerful trade tool. Sri Lankan and Japanese officials should study more on a possible FTA before embarking on this journey,” stressed Hiroyuki Ishige, Chairman of the powerful Japanese trade and investment arm, Japan External Trade Organisation (JETRO) yesterday.
Ishige was responding to Minister of Industry and Commerce Rishad Bathiudeen during his courtesy call on Bathiudeen, who inquired about the possibility of a Sri Lanka-Japan FTA for bilateral trade growth.
Bathiudeen presented his FTA suggestion in a background of continuous trade rise with Japan. Bilateral trade between the two countries has been growing, totalling $ 770 m in 2012, an increase of 56% from 2002. In the first half of 2013 alone, bilateral trade stood at $ 413 m.
Ishige is accompanying the high-powered Japanese biz and investment delegation now in Colombo on a four-day tour. Organised by JETRO Colombo, this one of the biggest Japanese delegations to arrive in Sri Lanka, for business or otherwise. The four-day visit is expected to give the eager Japanese investors a firsthand view on investment, B2B and trade terrain of Sri Lanka.
JETRO Colombo revealed that it is collaborating in this effort with the Sri Lanka-Japan Business Cooperation Committee and the Japan-Sri Lanka Business Cooperation Committee with support from the Embassy of Japan in Colombo.
Japan is one of the leading investors in Sri Lanka, having entered the country in the immediate aftermath of the opening of the economy in 1977 and continually enhancing its presence. In fact Japan has been one of the leading global players in Lanka’s industrial modernisation in the country’s recent history. To date, there are 39 Japanese supported projects in Sri Lanka. Sri Lankan firms and manufacturers continuously look to Japanese investors for high tech knowhow and knowledge transfer.
“Geographically Sri Lanka is in a very important location. In fact it is one of the best locations in the world. However, production costs, especially energy costs, are high here… I recommend that you study the mega FTAs in the region and think of the possibility of becoming part of the international supply chain. We, the Japanese, shall extend our help to Sri Lanka to join such supply chains,” stressed Ishige.
“We thank the people of Japan for their continuous support for Sri Lanka’s growth” said Bathiudeen. “We are pleased that more Japanese investors are studying Sri Lanka’s business climate, which shows your keenness. There are opportunities for Japanese investors in many avenues here, including value addition in such sectors as mineral sands, for which I invite Japanese investors to partner with us and use our FTAs with India and Pakistan to access their huge markets.”
Ishige also presented some issues faced by Japanese investors in Sri Lanka, specifically the cost of production escalation for Japanese investors due to the increase in the domestic electricity tariff. In response, Bathiudeen pointed out the planned power sector expansions – the forthcoming additions to the power grid such as Sampur station and output from Norochcholai power station.
During the official working visit to Japan by President Mahinda Rajapaksa in March 2013 at the invitation of the Prime Minister of Japan Shinzo Abe, both leaders in their joint statement noted the need to dispatch a Japan External Trade Organisation (JETRO) joint investment mission to Sri Lanka, as a follow-up to the investment seminar that would take place during the President’s visit to Japan, to conduct JETRO’s survey on needs and strategies for Japan-Sri Lanka business, and to dispatch experts from New Energy and Industrial Technology Development Organisation (NEDO) in order to explore the possibility of bilateral cooperation.
