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Sri Lanka is committed to an outward-oriented trade regime following WTO principles, with a view to enhancing overseas market access for its products and achieving greater integration in the world economy. Towards achieving the desired objectives, Sri Lanka continues to simplify her tariff structure and encourage foreign direct investment (FDI) into the country in technology-intensive, value-added sectors and for infrastructure development, to expand output while generating employment opportunities.
At the regional level, Sri Lanka is a member of the South Asian Free Trade Area (SAFTA) and the Asia-Pacific Trade Agreement (APTA). At the bilateral level, Sri Lanka has FTAs with India (Indo-Sri Lanka Free Trade Agreement - ISFTA) and Pakistan (Pakistan-Sri Lanka Free Trade Agreement - PSFTA). Sri Lanka and India is in discussion to elevate the ISFTA to an Economic and Technological Cooperation Agreement (ETCA) in the foreseeable future.
Sri Lanka is continuing negotiations on FTAs with China and Singapore. In addition, Sri Lanka enjoys Tariff Concessions under the EU-GSP Plus Scheme and other GSP Schemes such as USA, CIS, Japan and Canada.
Sri Lanka has expressed interest in discussion on an FTA with the Republic of Korea. A proposal for a Joint Economic Commission between the two countries within the framework of an Economic Cooperation Agreement is in process.
Sri Lanka’s composition of International Trade from 2012 to 2016 is given in the following Table.
It is observed that thevolume of bilateral trade betwee Sri Lanka and the Republic of Korea stood at US$ 394 Mn. in 2016, consisting of Sri Lanka’s import of US$ 325 Mn. and exports of US$ 69 Mn., with a favourable Balance of Trade of US$ 256 Mn for the Republic of Korea. Although the trade volume is modest, there is much potential for increase in bilateral trade between the two countries.
Sri Lanka’s main export items include, Apparel, Ceylon Tea, Rubber & Rubber-based Products, Spices & Allied Products, Coconut & Coconut-based Products, Gems, Diamond & Jewellery and Seafoods.