ENSURING SRI LANKA UNDERSTANDS OUR FTA STANDARDS

UNCLAS COLOMBO 001146 SIPDIS DEPT PASS TO USTR STATE FOR SA/INS E.O. 12958: N/A TAGS: ETRD CE USTR ECONOMICS SUBJECT: ENSURING SRI LANKA UNDERSTANDS OUR FTA STANDARDS Ref: State 188657 ¶1. Charge met with Minister of Commerce and Consumer Affairs Ravi Karunanayake on July 1, during a call on the Minister by US Reps Jerry Weller and Scott Garrett, both in Sri Lanka on a private visit. Charge used the meeting to encourage the Government of Sri Lanka (GSL) to study the texts of the FTAs the US recently signed with Singapore and Chile, as requested in reftel. The US, Charge noted, sees the Singapore and Chile texts as good templates for any future FTAs the US might enter into. ¶2. Karunanayake said that GSL had already looked at the text of both FTAs and would study them further. Charge pressed Karunanayake for GSL to go through these FTAs, clause by clause, and assess where Sri Lanka stood in meeting each requirement. Charge also told Karunanayake that GSL should not get ahead of itself; it was important to maintain focus on the Trade and Investment Framework Agreement (TIFA) process, which the US sees as a necessary step toward enhancing bilateral trade ties. ¶3. Earlier, before receiving reftel, Charge spoke to Ken Balendra, a leading Sri Lankan businessman whom GSL has tapped as head of an inter-agency task force to prepare for a US-Sri Lankan FTA. Balendra said he and his staff had indeed looked at the Singapore and Chile FTAs. Charge pointed out that an FTA negotiation with the US would be lengthy and require some tough decisions on Sri Lanka's part. Sri Lankan Embassy Commercial Counselor Udagedara joined the conversation to say that he hoped the text of a US-Morocco FTA (once negotiated) could also be used as a model for Sri Lanka, since "development arguments" were being used with Morocco in a way not relevant to more advanced economies like Singapore and Chile. -------------- Comment -------------- ¶4. Expectations for the prospect of a US-Sri Lankan FTA are high in trade circles here. Visiting US Reps Weller and Garrett have heard of Sri Lanka's enthusiasm for an US FTA in meetings with the several GSL Ministers, including the Prime Minister, and various business groups. GSL understands we only do "gold-standard" FTAs; detailed study of the Singapore and Chile agreements will show them just how high our standards are. As the TIFA process moves forward, post is committed to leveraging Sri Lanka's enthusiasm for an FTA into the commitments on further economic liberalization needed to prove it is indeed ready to be our free trade partner. CAMP