Trade agreement with Vietnam on the cards

Saturday, 16 August 2014 00:12 - - {{hitsCtrl.values.hits}}

Historic trade talks start 21 August in Vietnam: Rishad
Been expecting this for a long time: Ambassador Thanh
SL-Vietnam trade surge by massive 88% YoY
YoY exports up by 107%

As YoY bilateral trade jumped by a huge 88%, the possibility of a first-ever official trade agreement with one of the most discerning Asian suppliers to Sri Lanka has edged closer to reality last week.

Outgoing Ambassador Plenipotentiary and Extraordinary of Vietnam to Sri Lanka Ton Sinh Thanh in discussions with Industry and Commerce Minister Rishad Bathiudeen

“Our record exports today at $ 130 b were strongly supported by the seven FTAs that we entered into. An FTA with Sri Lanka can boost bilateral trade, especially for Sri Lankan exporters. We should consider at least a Preferential Trade Agreement (PTA),” said Ton Sinh Thanh, outgoing Ambassador Plenipotentiary and Extraordinary of Vietnam to Sri Lanka) in Colombo. Thanh was addressing Minister of industry and Commerce Rishad Bathiudeen on 7 August in Colombo during his farewell courtesy call on Bathiudeen. Thanh, who served a successful three-year stint in Colombo, is scheduled for New Delhi next. Joining Bathiudeen on 7 August were Department of Commerce DG R.D.S. Kumararatne and EDB Chairman/CEO Bandula Egodage. “Seen from our end, bilateral trade in 1H 2014 is already at $ 109 m and therefore at the end of this year, we can expect a very strong bilateral trade performance. Also, 2014 1H Sri Lanka exports to Vietnam have already equalled 2103 full year exports and therefore, this will be a record year for Lankan exports to Vietnam,” said Thanh. Noting that Vietnam has been expecting this trend for a long time, which it is seeing at last, he asserted that that Vietnam wants more of Sri Lanka’s black tea, gems and leisure boats while it also wants to send more of its products here. “This is the reason we set up the Sri Lanka-Vietnam Business Centre here. Since there is almost no information in Vietnam on Sri Lanka products, it’s time you too set up a similar centre in Vietnam to promote your exports to our country, which will no doubt be very useful to businesses at both sides. Your tariff for incoming Vietnamese products is still high but under a trade agreement; tariff on your products at our end too could be adjusted. Sri Lanka’s ITC/BPO as well as rubber products too are lines that you can try in Vietnam,” he added. Thanh said that the issue with Sri Lanka’s exports is not marketing but production capacities and Sri Lanka needs to increase investments and identify products that are to its advantage in this regard. “Looking through our own experience, I observe that Sri Lanka, with its diverse fisheries, is lagging in its export of seafood and fisheries and I see very vast potential in it for you. Vietnamese drink green tea but our youth market is turning to black tea and Sri Lankan black tea is now in demand and our youth love it – especially flavoured teas. It is time that more than one Lankan tea brand enters Vietnam.” Thanh said that during the forthcoming Sri Lanka-Vietnam trade talks in Vietnam on 21 August, Sri Lanka could impress upon Vietnam the FTA’s importance for trade, while focusing on setting up sub committees on trade and amidst discussions on a PTA. “I also strongly suggest you make proposals to Vietnam to set up an exclusive Sri Lankan export promotion zone in Vietnam to be operated by Lankan manufacturers similar to the Vietnam-Singapore Industrial Park,” he noted. Bathiudeen said: “We congratulate you on your new appointment to yet another important trade partner of Sri Lanka, wish you great success in your new assignment and thank you for your strong contribution in enhancing our bilateral cooperation during your stay here. According to the Department of Commerce of Sri Lanka, total Lanka-Vietnam trade in 2013 rose to $ 224.39 m, a surge of 88% from 2012’s $ 119 m. This was supported by increased exports of apparels, footwear, pepper and seafood (fresh and frozen).” Bathiudeen said total exports to Vietnam alone rose by a huge 107% in 2013 to $ 43 m from 2012’s $ 21 m. “These promising trends enable us towards the need for more formal trade ties such as trade agreements so that mutual benefits could be greatly enhanced. We too look forward to productive discussions during our Vietnam trade talks and we are positive of expectations. I also invite Vietnamese investors to Sri Lanka. As for development of fisheries exports, we too understand that it is underutilised and we shall be making an integrated effort involving our fisheries sectors. We will discuss with our manufacturers on creating a Lankan Free Trade Zone in Vietnam.” Thanh responded that Vietnamese investors had now entered into global investments such as oil and gas projects (in Venezuela), as well as telecoms and hotels in many other countries and that these were the sectors of interest for them at this moment. Welcoming Vietnamese investors to Sri Lanka’s tourism infrastructure, rubber production, boat building, urban development and infrastructure construction, Bathiudeen said: “100% participation-ownership is allowed by our Government for foreign investors on their valuable investments, especially when they enter priority sectors such as tourism development. Foreign investments are given constitutional guarantees of safety with 100% profit repatriation.” Bathiudeen and Thanh also discussed progress in other areas of bilateral cooperation.