Sri Lanka–Turkey trade talks resume after 26 years

Sri Lanka–Turkey trade talks resume in Ankara after 26 years

• ‘We meet at a momentous time after 26 years’-Rishad
• Second SL-Turkey trade talks successfully conclude in Ankara
• ‘Bigger benefits due to our India, Pakistan FTAs & ETCA’-Rishad

As bilateral trade surged by more than 130%, trade talks between Turkey and Sri Lanka re-opened on 11 November in Ankara-after 26 years.

“Turkey is a very important trading partner for Sri Lanka. The strong relationship between the two countries has grown steadily over the past years” said Minister of Industry and Commerce Rishad Bathiudeen on 11 November in Ankara.

Minister Bathiudeen was delivering his opening statement at the Second Session of the Sri Lanka –Turkey Joint Committee Meeting of Technical and Economic Cooperation in Ankara on 11 November. Minister Bathiudeen led the Lankan delegation to Ankara while the Turkish side was led by Minister of Education of Turkey Ismet Yilmaz. In 2015, bilateral trade between the two countries stood at $230 Mn.

“Sri Lanka and Turkey have enjoyed 68 years of formally established diplomatic relations in the recent history. The initiative to establish the Sri Lanka- Turkey Joint Committee in 1991, is a land mark in our partnership. The coordinated efforts by both sides to put in place an effective mechanism for robust cooperation at bilateral level and the international fora, unfortunately went through a hiatus of 26 long years due to various unavoidable circumstances. Although we have not been able to convene the Joint Committee for 26 years, relations between Sri Lanka and Turkey flourished especially since the establishment of resident Diplomatic Missions in Ankara and Colombo in 2012 and 2013 respectively” said Minister Bathiudeen, and added: “The First Round of the Sri Lanka Turkey Joint Committee on Technical and Economic Cooperation after 26 years takes place at a momentous time in Sir Lanka when Sri Lanka is pursuing an open and transparent agenda to strengthen democracy and its structures and the rule of law to ensure that the fruits of democracy peace and prosperity are enjoyed by its entire people. Sri Lanka’s economy offers a great opportunity for both investment and trade within Sri Lanka and avenues to penetrate the huge South Asian market. Today, Sri Lanka aspires to rebuild the country and develop its economy in partnership with friendly countries such as Turkey. We are at a unique moment in our country’s history. For the first time the two main political parties, the United National Party (UNP) and the Sri Lanka Freedom Party (SLFP) have reached consensus to move forward in unison for a common cause – that is to work towards achieving important national objectives in keeping with the aspirations of the people of our nation. On the economic front Sri Lanka being a founder member of the GATT as well as WTO, has been fully committed to liberal and market oriented Economic policies introduced in 1978 with the objective of achieving greater integration into the world economy.  It may be noted the High degree of openness to international trade, investor friendly atmosphere, and encouragement of foreign direct investment, among others, reflect the country’s commitment to the establishment of an environment conducive to private sector business development. Similarly, the achievements in terms of human capabilities have placed Sri Lanka at a higher rank, in the Human Development Index (HDI) compared to her South Asian neighbours. As a developing middle income country, and considering our strategic location, Sri Lanka will continue to follow open and free market economic policy to promote and expand trade and economic links with the outside world, and work towards being a foremost center in the region. Prime Minister of Sri Lanka while presenting the Economic Policy of the government to the parliament on 27 October 2016 has especially emphasised the importance that will be given to some identified sectors in order to attain sustainable and rapid economic growth for Sri Lanka. Sri Lanka’s location in the heart of the Indian Ocean straddling Western and Eastern Asia has made us beneficiaries of inter-regional trade for centuries.  The strategic importance of Sri Lanka as a regional hub in the realm of global commercial activity has been widely acknowledged. The turn of the millennium has also witnessed another important development.   Unprecedented economic growth in Asia has shifted the world economic centre of gravity to the East since China has become the largest economy in the world. Thus, new consumer markets in Asia and the expansion of the Asian middle class are changing the traditional focus of markets. The ADB has predicted that Asia will account for half of all global economic output by 2050 if the current levels of growth are maintained. With 2 billion population, South Asia is also a considerable market with growing significance.  It is in this evolving context and dynamics of the globe that we in Sri Lanka have started to plan and project our own future. Sri Lanka has already Free Trade Agreements with Pakistan and India. As a member of South Asian Association for Regional Cooperation, Sri Lanka also enjoys free trading facilities with other South Asian countries under South Asian Free Trade Area. In order to further deepen economic ties existing with India, Sri Lanka will be entering into an agreement on Economic and Technology Cooperation (ETCA). The ETCA agreement seeks to boost cooperation in technical areas, scientific expertise and research amongst institutions, boost standards of goods and services able to compete on the global market and improve opportunities for manpower training and human resource development. At the moment negotiations are also underway to conclude free trade agreements with China and Singapore. It is evident that through these agreements Sri Lanka provides a stepping stone to reach out to a huge market. Turkey is a very important trading partner for Sri Lanka. The strong relationship between the two countries has grown steadily over the past years with exchange of official and private sector delegations. The value of total trade turnover between the two countries has increased from US$ 97 Million in 2005 to US $ 230 Million in 2015. Sri Lanka’s major export items to Turkey are Tea, staple fibres, Apparel, Activated carbon, Activated natural mineral products etc. Tea is a major item and the value of tea export to Turkey in 2015 accounted for 76% of Sri Lanka’s total exports. The value of Sri Lanka’s imports from Turkey has also been increased in the recent years reaching $ 50 Mn in 2015. The major item of imports from Turkey are Plastics, Miscellaneous edible Preparations, Parts and accessories of the motor vehicles, Refrigerators, Freezers, Electric and electronic products etc. Turkey has invested US$ 2.5 Million FDI in Sri Lanka from 2010 to 2015 and ranks 45th position among FDI sourcing countries to Sri Lanka. Tourism is another area that has connected and brought about closer people to people contacts as Turkish Airlines flies from Istanbul to Colombo direct.”

“Let us target trade volume to $500 million by 2020” said the Turkish Minister Ismet Yilmaz, and added: “Relations between both countries span a broad range of aspects. During today’s meeting we finalised many areas of cooperation, which is a positive development.”

Bilateral trade between the two   is on a growing trend, registering an increase of around 135% by 2015 when compared to 2005.