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.

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Comment
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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