{"id":103512,"date":"2020-06-14T14:54:53","date_gmt":"2020-06-14T21:54:53","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=103512"},"modified":"2020-06-14T14:54:53","modified_gmt":"2020-06-14T21:54:53","slug":"the-post-covid-trade-order-only-the-fast-and-the-nimble-will-survive-says-pathfinder","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2020\/06\/14\/the-post-covid-trade-order-only-the-fast-and-the-nimble-will-survive-says-pathfinder\/","title":{"rendered":"THE POST-COVID TRADE ORDER: ONLY THE FAST AND THE NIMBLE WILL SURVIVE, SAYS PATHFINDER"},"content":{"rendered":"

Pathfinder foundation <\/strong><\/em><\/span><\/h2>\n\n\n

Now\nthat Sri Lanka has achieved notable success in containing the danger posed by\nthe COVID-19 pandemic to the health of the nation, the time has come for a\nconcerted and decisive focus on reviving the economy.  This is particularly timely now that the\neconomy has been removed from its induced coma\u201d with the elimination of\ndaytime curfew throughout the island. <\/p>\n\n\n\n

A\nPathfinder Foundation Study Group produced a report which set out a new\neconomic vision for post-COVID-19  Sri\nLanka.  It has been shared with the key\nleaders of the government.  An important\nrecommendation in the Report was the pursuit of trade agreements.<\/p>\n\n\n\n

The\nDoha Round of Multilateral Trade Negotiations is at an impasse.  It has probably been dealt a fatal blow with\nthe disengagement of the current US administration from the WTO.  Many countries have responded by pursuing\nbilateral, regional and plurilateral trade agreements to boost their growth and\nemployment prospects.  Sri Lanka has\nfallen behind and is confronted with the possibility of falling even further\nbehind. <\/p>\n\n\n\n

The\nSri Lankan authorities have done well to stabilize the external position of the\ncountry despite the extreme shock delivered by the pandemic to Sri Lanka\u2019s key\nsources of foreign exchange: remittances; apparel exports; tourism receipts;\nearnings from shipping, FDI inflows; foreign institutional investment in\ngovernment securities and the stock market; as well as the prospects of raising\nmoney from international capital markets. However, the temporary import bans\nand the decline in oil prices have served to mitigate the worst effects of\nthese adverse trends.  The effectiveness\nof these measures is reflected in the forex market, where the LKR has been\nlargely stable after its initial sharp depreciation to LKR 199: USD.  It has now stabilized around LKR 186:USD.  <\/p>\n\n\n\n

However,\nthe economy is in a sub-optimal equilibrium as far as growth and employment\nprospects are concerned.  There have been\nsome green shoots of recovery in exports of apparel, seafood, tea and some\nrubber products.  However, this is far\nfrom sufficient to support the country\u2019s ambitions on growth and employment. <\/p>\n\n\n\n

For\nthis to happen, Sri Lanka has to work towards a transformation of its export\nand FDI performance. This has proved elusive so far.  The measures needed to achieve this are well\nknown.  They must now be implemented\neffectively and trade agreements need to be an integral part of this\neffort.  <\/p>\n\n\n\n

The\nshift of the centre of gravity of the global economy to the East is likely to\nbe accelerated in the post-COVID-19 world. \nAt present, over 50% of Sri Lanka\u2019s exports are to the EU and US.  More needs to be sold to Asia.  In addition, the export basket needs to be\nmore diversified and complex.  Trade\nagreements provide access to markets, investment and know-how which can\ncatalyse the diversification of both export markets and the product mix. <\/p>\n\n\n\n

On\nFDI, a market of 21 million people with purchasing power based on USD 4000 per\ncapita income is not attractive in a world where over 190 countries are\ncompeting for investment inflows. \nSecuring enlarged market access on a preferential basis is therefore a\nmatter of high priority, particularly at a time when global supply chains are\nbeing reconfigured for the post-Covid19 world. <\/p>\n\n\n\n

The\nPathfinder Foundation recommends that Sri Lanka:<\/p>\n\n\n\n

1.\nSell more to Asia, the most dynamic region and the part of the world which is\nrecovering most quickly from the effects of the pandemic; and <\/p>\n\n\n\n

2.\nEnlarge preferential market access to attract FDI to promote export\ngrowth.  <\/p>\n\n\n\n

An\nurgent priority therefore is to revive and accelerate the negotiation of a\npartnership agreement with China; an expanded agreement with India; and an\nagreement with Thailand.  Agreements with\nother Asian countries, particularly other ASEAN members and Japan, should also\nbe explored.  Another goal should be\nmaximizing the benefits from the Agreement with Singapore.  <\/p>\n\n\n\n

In addition,\nthe UK remains an important trading partner. \nBrexit negotiations have recommenced. At the same time, the UK is\nnegotiating trade deals with non-EU countries. It is important that Sri Lanka\nnegotiates an early trade deal with the UK which sets the GSP Plus preferences\nas the minimum.  <\/p>\n\n\n\n

3. In\norder to accelerate these processes, it is important that an empowered and\ntechnocratically competent high-level trade negotiating team is appointed\nreporting directly to the highest level of government.  <\/p>\n","protected":false},"excerpt":{"rendered":"

Pathfinder foundation Now that Sri Lanka has achieved notable success in containing the danger posed by the COVID-19 pandemic to the health of the nation, the time has come for a concerted and decisive focus on reviving the economy.  This is particularly timely now that the economy has been removed from its induced coma\u201d with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-103512","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/103512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=103512"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/103512\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=103512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=103512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=103512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}