EU Indo-Pacific Trade Strategy Would be Based on Multilateralism – Dr Asanka Wijesinghe
27 January 2022
IPS Research Fellow Dr Asanka Wijesinghe said that the EU Indo-Pacific Trade Strategy would be based on multilateralism and rules-based open trade at the conference on ‘EU Indo-Pacific Strategy through Sri Lanka’s Lens: Opportunities for Cooperation and Partnership’. The conference was organised by the Lakshman Kadirgamar Institute of International Relations and Strategic Studies, in partnership with the Delegation of the European Union to Sri Lanka and the Maldives.
Dr Wijesinghe remarked that Sri Lanka’s existing import controls would be a challenge if the EU strategy calls for an increased role for the World Trade Organization (WTO). Moreover, Sri Lanka must solve GSP+ related issues to maximise the benefits from preferential access. The existing non-reciprocal GSP+ trade arrangements benefit both parties. Sri Lanka has preferential access to the EU market while the EU firms can utilise the preferential margin and factor cost advantage of relocating low-tech manufacturing firms to Sri Lanka.
He further highlighted that the EU market is vital for Sri Lanka to increase high tech manufacturing exports under HS chapter 85. Potential trade deals between the EU and Indo-Pacific economies might divert trade away from Sri Lanka, and this needs to be taken into consideration by policymakers. He also stated that tangible economic benefits would bolster strategic alliances. Thus, both parties should resolve vital issues such as Sri Lanka’s import controls, GSP+, existing sanitary and phytosanitary regulations of the EU, and Rules of Origin (ROO) under GSP+.
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