Time is ripe for a Vietnam-SL FTA

Sri Lanka Bureau of Foriegn Employment (SLBFE) chairman Amal Senalankadhikara, APL Group of Companies chairman Anura Lekamge, Central Bank Governor Ajith Nivard Cabraal and Vietnamese ambassador to Sri Lanka Ton Sinh Thanh at the opening of the Sri Lanka and Vietnam Business Centre at APL Green Towers,Kelaniya.

Although there is a lot of unexploited potential and opportunities for trade between Sri Lanka and Vietnam, the high tariff and fees imposed on Vietnamese products are hindering the trade flow between the countries, Vietnamese ambassador to Sri Lanka Ton Sinh Thanh said yesterday. 

Thanh was addressing the opening ceremony of the Sri Lanka- Vietnam Business Centre at APL Green Towers in Kelaniya to strengthen the relationship between the countries, economically and technologically, by attracting more Foriegn Direct Investment (FDI) and providing foreign employment opportunities. 

Ambassador Thanh stressed that the trade volume with Sri Lanka had increased but remained very small in comparison with Vietnam trade with other countries. 

`There are disadvantages for Vietnamese products in comparison with those of other countries that already have or are going to have free trade agreements with Sri Lanka, he added. 

Thanh noted that, therefore, it might be time for the governments of Vietnam and Sri Lanka to seriously consider a kind of preferential trade agreement or Free Trade Agreement. 

He also explained that over the past three years, two way trade had been increasing by around 30 percent per year, the highest rate in Vietnamese trade with other South Asian countries. 

According to the ambassador, in the first half of this year, Vietnam- Sri Lanka bilateral trade volumes reached US$ 109 million, almost equal to the volume for the whole of 2011. 

He believed that the total trade volume between the two countries this year would surpass US$ 200 million. 

`It is significant that Sri Lanka exports to Vietnam in the first half of this year has reached US$ 43 million, more than total exports of Sri Lanka to Vietnam last year,` the ambassador said. 

He also mentioned that the product lines traded between the two countries had also been expanding. 

In 2012 there were only 39 product lines traded and in 2013 the number was 76, an increase by nearly 100 percent, he said adding that many other products could be supplied to Sri Lankan market by Vietnam, such as, agricultural machines and equipment, construction materials, cement, plastic products, electronic products, mobile phones. 

In the same way, many Sri Lankan brands could be supplied to Vietnam, such as, gems and jewellery, different varieties of flavoured tea, leisure boats, he added. 

Meanwhile citing an Asian Development Bank (ADB) study, Central Bank Governor Ajith Nivard Cabraal said that the first 1800 years AD had been dominated by Asian economies and it was only during last 200 years that Europe as well as America had dominated the world economy. 

Cabraal, however, predicted that by 2030, Asia would once again be contributing more than 50 percent of the global economy. 

`In that sense it is important the countries of Asia work together by further expanding the trade among the Asian countries, he added. 

Source: LankaNewspapers.com