May 4, 2006	Thursday	Rabi-us-Sani 5, 1427

ISLAMABAD, May 3: Sri Lankan Minister for Trade, Commerce and Consumer Affairs Jeyaraj Fernandopulle on Wednesday proposed that textile producing countries in the region should collaborate with each other to compete with Chinese products in the international market.

Talking to Dawn following a speech at a round-table on “Safta: Agenda for trade liberalisation in Saarc”, the Sri Lankan minister said that it would not be easy for any South Asian country to compete with the textile products of China.

“It could only be possible if all the Saarc member countries join their hands. This cooperation is now possible as Safta is going to be implemented from July this year,” the minister remarked.

Mr Fernandopulle said that the Saarc members should allow exchange of raw materials for manufacturing of valued-added textile products at preferential duty.

He said that Pakistani businessmen could export cotton to Sri Lankan weavers to convert it into fabrics for its subsequent use in the manufacturing of garments.

If this happened, the minister said, Colombo would stop importing textile inputs from China, Taiwan etc. However, he said this would only be possible if Saarc members enhance trade cooperation and manufacture their own products.

Sharing the experience of free trade agreements (FTAs) of Sri Lank with India and Pakistan, the minister said without the complete elimination of non-tariff barriers (NTBs) it was not possible to get maximum benefits from free trade regime.

He quoted many NTBs which were restricting the export of Sri Lankan goods to India. He said that agriculture products were mostly restricted in the Saarc countries.

Under FTA with India, Sri Lankan exporters were facing problems of customs duties, inspections of goods and NTBs. “We cannot even utilise the one per cent quota allocated for Sri Lankan garments due to 17 per cent sales tax levied by India making our products less competitive”, the minister said. He stressed for elimination of such NTBs under Safta.

The minister was of the opinion that no tangible growth in trade could be materialised under Safta until there was a free movement of the businessmen of the region. “We want that other Saarc member countries to follow liberal policy for granting visas to businessmen”.

The Lankan trade minister said that the benefits of reduced tariffs should be passed on to consumers of the region.

Under GSP plus scheme, the European Union had offered Sri Lanka duty free access to 7,000 items including garments. “We invited Pakistani businessmen to come and invest in various sectors to get benefits of duty-free access to EU countries,” the minister added.