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Trade Policy Review Body    
 
* In Original language only/ En langue originale seulement /En el idioma original solamente . 
  SRI LANKA 
DRAFT MINUTES  OF THE MEETING* HELD ON 1 AND 3 NOVEMBER 201 6 
Delegations are invited to submit factual corrections, if any, on their own statement to the 
Secretariat ( Mrs Barbara Blanquart: barbara.b lanquart@wto.org , or to  tprd@wto.org ) no later 
than 6 January 2017 . 
 
Organe d'examen des politiques commerciales  
 
SRI LANKA 
PROJET DE COMPTE REN DU DE LA RÉUNION* TENUE LES 1 ET 3 NOVEMBRE 2016  
Les délégations sont invit ées à soumettre  leurs éventuelles corrections factuelles concernant leurs 
propres déclarations au Secrétariat ( Mme Barbara Blanquart: barbara.blanquart@wto.org , ou 
tprd@wto .org) le 6 janvier 2017  au plus tard.  
 
Órgano de Examen de las Políticas Comerciales  
 
SRI LANKA 
PROYECTO DE ACTA DE LA REUNIÓN* CELEBRADA LOS DÍAS 1 Y 3 DE NOVIEMBRE D E 2016  
Las delegaciones pueden enviar a la Secretaría (Sr a. Barbara Blanquart: 
barbara.blanquart@wto.org , o tprd@wto.org ) a más tardar el 6 de enero de 2017  las 
correcciones fácticas que deseen introducir en sus propias declaraciones.  
 
 
_______________  
 WT/TPR/W/119  • Sri Lan ka 
 
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  TRAD E POLICY REVIEW  
SRI LANKA 
DRAFT  MINUTES OF THE MEETI NG 
Chairperson: Ms Irene Young (Hong Kong, China)  
CONTENTS  
 
1  INTRODUCTORY REMARKS  BY THE CHAIRPERSON  ................................ .......................  3 
2  OPENING STATEMENT BY  THE REPRESENTATIVE O F SRI LANKA  ................................ .. 5 
3  STATEMENT BY THE DIS CUSSANT  ................................ ................................ ................  9 
4  STATEMENTS BY MEMBERS  ................................ ................................ ........................  13 
5  REPLIES BY THE REPRE SENTATIVE OF SRI LAN KA AND ADDITIONAL 
COMMENTS  ................................ ................................ ................................ .....................  30 
6  CONCLUDING REMARKS B Y THE CHAIRPERSON  ................................ .........................  33 
 
 
Note: Advance written questions and additional questions by WTO Members, and the replies 
provided by Sri Lanka are reproduced in document WT/TPR/M/347/Add.1 and will be available 
online at http://www .wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.  WT/TPR/W/119  • Sri Lanka  
 
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  1  INTRODUCTORY REMARKS  BY THE CHAIRPERSON  
1.1.  The fourth Trade Policy Review of Sri Lanka was held on 1 and 3 November 2016. The 
Chairperson, Ms. Irene Young (Hong Kong, China), welcomed the delegation of Sri Lanka headed 
by H.E. Mr. Rishad Bathiudeen, Minister of Industry and Commerce; the delegation from 
Sri Lanka; and the discussant, H.E. Ambassador Dr. Stephen Ndungu Karau (Kenya).  
1.2.  The Chairperson recalled the purpose of the Trade Policy Reviews and the main ele ments of 
the procedures for the meeting. The report by Sri Lanka was contained in document 
WT/TPR/G/347 and that of the WTO Secretariat in WT/TPR/S/347.  
1.3.  Questions by the following delegations had been submitted in writing before the deadline: 
European Unio n; Canada; Australia; Turkey; New Zealand; Chinese Taipei; Brazil; Singapore and 
Republic of Korea. The following delegations submitted written questions after the deadline: China; 
United States and Malaysia.  
1.4.  Members were also pleased to have with them th e United Nations Industrial Development 
Organization which – as agreed by Members earlier – was attending this meeting as observer on 
an ad hoc basis.  
1.5.  At the previous TPR in 2010, Members had commended Sri Lanka for its solid economic 
performance despite a  myriad of adverse factors. During the current review period, the country's 
economy had shown resilience and had continued to grow at an average annual growth rate of 
6%. However, the fiscal position was weak and seemed to be getting worse, with public deb t rising 
to 76% of GDP last year. In their advance questions, the Chairperson noticed that some Members 
had asked how this problem was to be addressed. Members knew that the Government had 
started pursuing fiscal consolidation through structural reforms wh ich, among other things, sought 
to increase tax revenues and improved the operations of state -owned enterprises. In fact, 
Members had already stressed the importance of introducing tax and SoE reforms in the last TPR. 
The Chairperson was sure they would li ke to learn more about the development on these fronts.  
1.6.  Last time, Members also had seen the need for Sri Lanka to deepen its regulatory reform and 
improve the business environment. In this TPR, Members raised again questions about the 
restrictions and inc entives for foreign investment. Enactment of the Underutilised Assets Act in 
2011 had also prompted some Members to ask about the new expropriation policy for companies 
and their assets. As Sri Lanka's FDI inflow ran low and attracting foreign investment b ecame a 
matter of priority, it was useful to know how the Government intended to address Members' 
concerns in this regard.  
1.7.  In 2010, noting that Sri Lanka's exports had been concentrated in certain markets and 
products, Members had encouraged the country to  step up its diversification efforts. While some 
progress had been made, agriculture and clothing still accounted for over 70% of exports, and 
clothing was highly reliant on two major export markets. Given that export diversification was an 
area identified  by Sri Lanka for Aid -for-Trade assistance, Members wished to have more 
information on the Government's action plan.  
1.8.  With regard to specific trade measures, Members were pleased to note that, since the last 
TPR, Sri Lanka had implemented a customs single w indow and had accepted the WTO Trade 
Facilitation Agreement. It had also reduced the number of tariff bands from four to three. 
However, some of the concerns that Members had raised six years ago, about Sri Lanka's tariff 
regime, remained unaddressed. For instance, Members still saw a large number of levies and 
charges in addition to the tariffs, and indeed more tariff lines where the MFN rate exceeded the 
bound rate. It would be useful to know how these issues would be addressed.  
1.9.  The previous review had al so raised certain questions regarding: the use of domestic 
preferences in government procurement; enforcement of intellectual property rights; and adoption 
of competition policy legislation. Six years on, it seemed that Sri Lanka had continued to use price  
preferences in procurement and had not yet introduced any substantial changes to its IP and 
competition regimes. If there was more updated information, the Chairperson hoped it could be 
shared with the Members in this TPR.  WT/TPR/W/119  • Sri Lan ka 
 
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  1.10.   The Chairperson encouraged Membe rs to make use of this opportunity to discuss in greater 
detail, not only the key issues identified above, but also other issues of interest to them and of 
systemic importance to the multilateral trading system.  WT/TPR/W/119  • Sri Lanka  
 
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  2  OPENING STATEMENT BY  THE REPRESENTATIVE O F SRI LANKA (H.E. MR. RISHAD 
BATHIUDEEN)  
2.1.  At the outset, let me thank the WTO Trade Policy Review team for their comprehensive report 
on Sri Lanka, also to you, Madam Chair, for your introductory remarks. We appreciate the r ole 
played by His Excellency Dr  Stephen Ndungu Karau as the discussant.  
2.2.  My delegation wishes to thank all the Members who made written questions to us. We have 
received around 138 questions from 12 Member countries. We have already submitted written 
responses to most of the questions and t he questions received late would be answered shortly.  
2.3.  I consider that the fourth Trade Policy Review of Sri Lanka at the WTO is taking place at a 
historic moment of my country mainly for two reasons.  
2.4.  Firstly, it takes place under the National Unity Governm ent of Sri Lanka. The National Unity 
Government was established for the first time in the history in January 2015 by the coalition of the 
two main political parties in the country. The two main political parties have agreed to work 
together on a national d evelopment agenda upholding democracy and good governance, although 
the two parties have differences in their political ideology. The main objective in forming a National 
Government is to provide a common platform to deliver long term social economic solut ions that 
can solve the key problems of the country.  
2.5.  The National Unity Government is in the process of introducing transformative reforms to the 
economy to further align it with the global economic direction while concentrating achievement of 
the Sustaina ble Development Goals declared in the agenda of the UN Sustainable Development 
Summit held in 2015.  
2.6.  Secondly, this Trade Policy Review is focusing on the developments in the country after 
ending prolonged civil conflict against terrorism of 30 years in 200 9. During the conflict one -third 
of the country has not been in a position to effectively contribute to GDP growth in the country. 
After the defeat of terrorism from the country in June 2009, my Government encountered 
enormous challenges in rehabilitating,  resettling and guaranteeing sustainable livelihood for the 
conflict affected people in the North and the East of the country.  
2.7.  I myself was a victim of this ruthless terrorism in the country. Although we peacefully lived in 
the northern part of the country , as Muslims we were given ultimatum by the terrorists to leave 
the Northern Province within 24 hours. We had to abandon all what we earned and the businesses 
that we ran for many years. We left the Northern Province with a shopping bag of material that we  
can carry. My family lived in many years in refugee camps and I managed to represent them to 
reach the Parliament as a member.  
2.8.  The rehabilitation and rebuilding process in my country cost the Government dearly both in 
capital and recurrent expenditure whi ch have substantially increased and the Government had to 
rely on debts from international sources. We are thankful to all those who generously assisted 
Sri Lanka in this exercise. At the same time, the Government had to continue its infrastructure 
develop ments in the country to create conducive business environment.  
2.9.  Developing its infrastructure to increase its economic potential has resulted in 
Sri Lanka's  reliance on foreign debt . The official estimate of what Sri Lanka currently owes its 
financiers is  US$65 billion. The country's debt -to-GDP currently stands around 75% and significant 
portion of all  government revenue is currently  going towards debt repayment . 
2.10.   As a result of the above, the Government started experiencing fiscal difficul ties to meet with 
country's both development and rehabilitating needs. The fiscal deficit to GDP has increased from 
6.5% in 2011 to 7.5% in 2015. In the light of the above, the Government is making every effort to 
consolidate its fiscal position.  
2.11.   We will g ive priority to enabling an increase in earnings through a policy of minimizing 
regressive taxes, increase the ratio of direct and indirect income tax generation in the medium 
term from 80%: 20% to 60%: 40%, strengthening the tax management processes while  removing 
tax holidays and benefits.  WT/TPR/W/119  • Sri Lan ka 
 
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  2.12.   Let me now briefly mention about my country and its performance during the period of this 
Trade Policy Review. Sri Lanka is an Island with 65 610 km2 with a population of 21 million. The 
GDP of Sri Lanka is at US$82.2 b illion in 2015. The per capita income has increased from US$2744 
in 2010 to US$3924 in 2015 becoming a lower middle income country. Sri Lanka was able to 
maintain its economic growth at an average rate of 6.4% over the period from 2010 to 2015 
despite exte rnal pressure arising from the global economic slowdown and the domestic economic 
challenges. The services sector is the largest contributor to the GDP having accounted for 60% 
followed by 31% from industry and 9% from agriculture.  
2.13.   The macroeconomic envir onment supported by the policy directives has been instrumental 
in achieving such economic results. Sri Lanka has been able to achieve many of its millennium 
development goals in the country, particularly eradicating of extreme poverty, primary education 
at 100% level, gender equality, child mortality by reducing infant mortality by 2/3, maternal 
health by reducing infant deaths 33 to 100,000, combating communal diseases i.e. elimination of 
Malaria from the country and working towards environmental sustaina bility.  
2.14.   In addition, Sri Lanka has been able to achieve a literacy rate of 93% facilitating towards 
establishing a knowledge -based work force in the country. Sri Lanka has been leading in many 
social and business development indices in the region. Sri Lank a has ranked 73 among 
144  countries placing it ahead of other emerging economies on global competitiveness index of 
the World Economic Forum. The World Bank Doing Business index has ranked Sri Lanka at 110 out 
of 190 countries.  
2.15.   With regard to import and export trade, Sri Lanka maintains a greater openness to 
international trade. My country introduced open trade policies since 1977. The consecutive 
Governments of Sri Lanka continue to engage in the policy measures towards trade liberalization.  
2.16.   Sri Lanka ha s been a founding Member of GATT and WTO. Sri Lanka is a country that 
believes in the multilateral trading system for establishing a level playing field for all its Members 
in the international trade with due recognition for development needs of developing  countries and 
in particular small and vulnerable economies. While appreciating recent outcomes of multilateral 
negotiations and, in particular, outcomes of Nairobi Ministerial, Sri Lanka looks forward to effective 
implementations of the decisions reached at this Ministerial.  
2.17.   Flexibilities through Special and Differential Treatments have been widely recognized for 
smaller economies during the DDA process. Further, Ministerial Declaration of MC -10 made in 
Nairobi (Paragraph 26) emphasized on such flexibiliti es for SVEs with the aim of facilitating their 
fuller integration into multilateral trading system by taking into account the needs of SVEs in all 
areas of negotiations. Sri Lanka seeks such flexibilities and Special and Differential Treatments 
during the process of WTO future negotiations.  
2.18.   Let me now refer to trade policy developments in Sri Lanka. With regard to tariffs, 
Sri Lanka's bound commitments made to the WTO are relatively at a lower level in both agriculture 
and non -agriculture products. With re gard to applied rate, currently Sri Lanka maintains three 
bands tariffs at zero, 15% and 30%. Over 56% of tariff lines are at zero duty level. Out of the 
remaining tariff lines, a majority is confined to lower bracket of tariff.  
2.19.   Despite Sri Lanka's commit ments to trade liberalization, a lower tariff structure has forced 
formidable challenges to the Government, in particular to the revenue sources.  
2.20.   The global market slowdown and the fluctuation on the global demand for the commodities 
that Sri Lanka trades have increased the country's vulnerability to external pressures. As a net 
food importing country, the situation has been critically reflected in the balance of payment.  
2.21.   The country's exports which stood at 30% GDP in the year 2000 has decreased to 15% in 
2014. Our total exports in 2015 to the world were at US$10.5 billion while imports remained at 
US$19  billion. This is further aggravated due to lower import tariff structure maintained by the 
country. In certain instances, the Government has been compelled  to adjust its applied tariffs to 
manage external vulnerabilities and domestic sensitivities.  WT/TPR/W/119  • Sri Lanka  
 
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  2.22.   I observed that many questions raised by the Members of the WTO were also concentrated 
on these temporary measures. I wish to inform them that this is a temporary  phenomenon and 
those measures are not at the expense of our commitment to the multilateral trading system. At 
the same time, I solicit attention of the WTO Members to assess the development needs of the 
country as a small economy.  
2.23.   The external sector perf ormances during the period of the review have reflected challenges 
encountered in the global trading environment as well as domestic economic concerns. As 
mentioned, the trade deficit in absolute terms has widened during the period reaching over 10% of 
the GDP.  
2.24.   Despite the benefit of lower expenditure on fuel imports, the slowdown in the growth of 
world demand for Sri Lanka's exports and resulted declining process have negatively reflected on 
the trade balance. Pressure on the balance of payment due to thi s significant gap has somewhat 
compensated from the remittances to the country by the Sri Lankans working abroad in particular 
in the Middle Eastern region. However, it is necessary for the Government to introduce policy 
directives to ensure exports led gr owth to the economy.  
2.25.   These developments directed the new Unity Government to embark upon on a new strategy 
of its trade relations with major trading partners and to work on an export -led economic growth 
strategy. In this regard, the new Unity Government h as emphasized on the following areas.  
a. Developing an enabling environment to strengthen the country's entry into global value 
chain. Exports of apparel from Sri Lanka have been the major industry that contributes 
over 50% of the total exports. This sector h as joined the global value chain with 
developing partnership with major distribution channels. The objective of the national unity 
government is therefore, to facilitate similar engagements with regard to other products 
and services areas.  
 
b. Developing comp etitive business environment and facilitating FDI to the country. The 
workforce in Sri Lanka is providing a promising competitive edge for investing companies 
in Sri Lanka. The Government's objective is to move away from traditional manufacturing 
engagemen ts to knowledge -based industries in the country.  
 
c. Developing strategies to enhance Sri Lanka's bilateral and regional trade engagements 
thereby diversifying country's products and markets and integrate into the global value 
chain of production in both good s and services. Sri Lanka is a party to Regional Trade 
Agreements with neighbouring countries, South Asian Nations and Asia -Pacific countries. 
While upholding the country's commitments to the multilateral trading system, Sri Lanka 
will explore further oppo rtunities for bilateral and regional trade with emerging economies. 
Sri Lanka has already initiated negotiations for bilateral FTAs with China and Singapore, in 
addition to its bilateral agreements with India and Pakistan. Sri Lanka believes that this 
approach will provide opportunities to diversify its products and markets. We are hopeful 
that Sri Lanka will also regain GSP+ market access to the EU in the near future.  
 
d. Promoting the country as the economic hub in Asia in developing necessary infrastructur e 
for this purpose. Sri Lanka is strategically located connecting East and West via sea and air 
routes. The country's business environment complemented with educated work force has 
great potential for Sri Lanka to be the economic hub in Asia. Towards this objective, the 
Government of Sri Lanka has expanded its seaports capacity by establishing a new port in 
the south of the country. Similarly, a new airport has been established. Other facilities 
such as telecommunication, banking system, insurance, and IT i nfrastructure have been 
developed. The Chinese silk route of trade is crossing the country and therefore, Sri Lanka 
as the business hub, will encourage trading partners for enhanced engagement.  
 
e. Sri Lanka aims at effective implementation of Trade Facilita tion. Sri Lanka, being a country 
open for trade, believes that minimizing trade barriers and reducing transaction cost of trade 
are effective and efficient ways for future development. Sri Lanka has placed great 
importance on the adoption of the Trade Faci litation Agreement. Sri Lanka has ratified the 
Trade Facilitation Agreement and our Instrument of Acceptance has been submitted to the 
Director General of WTO on 31st May 2016. I am pleased to mention here that my country in 
close liaison with the WTO, the  World Bank Group, ITC, UNCTAD, World Customs WT/TPR/W/119  • Sri Lan ka 
 
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  Organization, UNIDO and the World Economic Forum, is working on an implementation 
programme and our objective is to establish a productive trade facilitation programme in the 
country with the assistance of the above international agencies and donor community.  
2.26.   Last but not least, I would like to mention that the National Unity Government is making 
dedicated efforts aimed at overcoming the challenge the country's economy is currently 
experiencing. Towards this tar get, Sri Lanka continues to maintain transparent trade and 
investment policies, minimizing non -tariff barriers, facilitating Foreign Direct Investment as a 
measure of attracting capital and technology. Sri Lanka is expected to reach the targets set in the 
2030 Agenda through export -led economic strategy.  
2.27.   Sri Lanka has so far achieved substantial economic progress despite the interrupted 
setbacks experienced due to external vulnerabilities and domestic issues. We are optimistic that 
Sri Lanka as a united cou ntry would be able to overcome all these challenges and improve its 
trading results with all our trading partners.  
2.28.   Once again, I thank all of you for your patience and also the Chair and the WTO Secretariat 
for their valuable contributions. Thank you.  WT/TPR/W/119  • Sri Lanka  
 
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  3  STATEMENT BY THE DISCUS SANT  
3.1.  I would like to join you in welcoming the delegation of the Democratic Socialist Republic of 
Sri Lanka led by Honourable Minister Rishad Bathiudeen, Minister of Industry and Commerce to the 
fourth Trade Policy Review of Sri Lanka.  
3.2.  I am pleased to have been invited, in my own capacity, to participate as a discussant at the 
fourth Trade Policy Review of Sri Lanka. I thank the WTO and the Government of Sri Lanka for the 
reports which have provided us with a good basis for today's discu ssions. I also thank the Chair for 
her introductory remarks as well as the Honourable Minister for his insightful presentation on the 
state of the Sri Lankan economy. I also thank you all for participating in this Trade Policy Review.  
3.3.  Members of the WTO a ttach a lot of importance to the Trade Policy Review process since it 
contributes to achieving greater transparency in, and understanding of, the trade policies and 
practices of Members. The review, therefore, does not only give us the opportunity to discu ss and 
understand Members' policies but also the opportunity to suggest corrective remedies where such 
policies are not friendly and supportive to economic and trade development. We also expect that 
the outcome of this review will contribute to the realiza tion of development goals being pursued by 
Sri Lanka.  
3.4.  My comments as a discussant will focus on three areas. First, the economic environment of 
Sri Lanka during the review period, that is from 2010 to 2015. Second, Sri Lanka's trade policies 
and practices,  and finally I will broadly touch upon developments in key economic sectors.  
Sri Lanka's Economic Environment from 2010 to 2015  
 
3.5.  Since the last review in 2010, the economy of Sri Lanka has performed relatively well. The 
economy has shown resilience in the aftermath of the global financial crises and following the 
resolution of the internal conflict, growing at an average annual growth rate in real GDP of 6% 
during the period under review. Growth was mainly driven by tourism, construction, wholesale and 
retail trade, and financial services sectors. It can therefore be observed that Sri Lanka's economy 
has transitioned from a previously predominantly rural -based agriculture economy towards a more 
urbanized economy driven by services.  
3.6.  Since the end of the inter nal conflict, Sri Lanka has been focusing on long -term strategic and 
structural development, as it strives to become an upper -middle -income country. As part of these 
development plans, Sri Lanka launched a " Mahinda Chinthana  – Vision for the Future"  in 201 0 
which outlines overall economic and development policies as well as setting out specific targets 
including for GDP and export growth, and also for structural change to reduce the reliance on 
agriculture in order to focus on development of the services an d industrial sectors. Implementation 
of programmes under the new "Vision for the Future" is therefore critical for Sri Lanka to realize its 
long term economic and development objectives.  
3.7.  Trade has continued to play an important role in the economy. However , its contribution has 
been declining. Trade in goods and non -factor services as a proportion of GDP declined from 55% 
in 2011 to 48.5% in 2015. The share of merchandise trade in GDP declined from around 47% in 
2011 to 36% in 2015. In contrast, the contrib ution of services to the GDP increased to 60%. These 
changes have been mainly attributed to weak demand in key merchandise export markets and an 
increase in tourism -related activities during the period under review. A key challenge that 
Sri Lanka faces is that its trade remains concentrated on a few markets and on a few products. 
The EU and the U.S. markets account for more than 55% of total exports. While exports continue 
to be heavily concentrated in textile and clothing, and agriculture which accounted f or over 70% of 
total exports in 2015. Sri Lanka's exports are mainly textiles and clothing, tea, rubber, machinery 
and transport equipment, gems and jewellery. Imports are mainly transport machinery and 
equipment, textile fabrics, petroleum products and fo od stuffs. It would be important to know the 
steps that are being taken by the Government of Sri Lanka towards diversification of exports and 
markets.  
3.8.  With respect to fiscal policy, it is noted in the Secretariat report that weak fiscal position and 
the resulting public debt overhang continues to constrain growth sustainability and development in 
Sri Lanka. During the period under review, the fiscal deficit increased from 6.5% of GDP in 2011 to WT/TPR/W/119  • Sri Lan ka 
 
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  7.5% in 2015. Likewise, as a result of persistent fiscal defic it, public debt rose from 71% of GDP to 
76% during the same period. Sri Lanka needs to tackle fiscal deficit in order to sustain growth and 
meet its long -term growth objectives. It is also noted that weak fiscal position has been 
exacerbated by bloated and  underperforming sate -owned enterprises which continue to be a drain 
to the national budget.  
3.9.  In order to address fiscal deficit, Sri Lanka has continued to take steps to enhance tax 
compliance, and to improve tax audit and risk management. Initiatives are also being taken to 
increase the efficiency of the Customs and Excise Departments. I am also pleased to note that 
Sri Lanka has embarked on a programme of reforming state -owned enterprises to make them 
more efficient and improve their performance. In addit ion to these initiatives, Sri Lanka should 
consider an expansion of the tax base in order to raise more revenue. It is also important for 
Sri Lanka to ensure that its fiscal policy entails increasing public investment in order to build up 
physical and soci al infrastructure for long term growth, and improving business environment for 
private investments.  
3.10.   With respect to monetary policy, the Central Bank of Sri Lanka is responsible for formulating 
and implementing the monetary policy whose objective is to ach ieve economic and price stability. 
The monetary policy framework of Sri Lanka places greater reliance on market based policy 
instruments and use of market forces which have enabled the country to achieve desired 
objectives. For instance, private credit has  been growing steadily overtime while inflation has been 
maintained at a single digit level. Sri Lanka should therefore continue to implement policy reforms 
aimed at addressing private sector competitiveness and productivity so that monetary policy plays 
an optimal role in efficient resource allocation and supports the country's vision for sustained high 
long-term growth. There is also a need to improved coordination between fiscal and monetary 
policies which is an essential pre -requisite for the achievemen t of growth, employment and price 
stability objectives.  
3.11.   The Central Bank of Sri Lanka has also been pursuing free floating exchange rate policy 
which has resulted in stabilizing the Sri Lankan rupee with a 2% band against the U.S. dollar. A 
stable exchange  rate is an important signalling mechanism to investors regarding the stability of 
Sri Lanka's macroeconomic environment. Foreign reserves have been maintained at around 
3-4 months' worth of imports which indicates that Sri Lanka is favourably positioned t o withstand 
an immediate external shock to the economy.  
3.12.   Preferential trade agreements have been the cornerstone of the trade policy regime of 
Sri Lanka as well as the springboard in its participation in the multilateral trading system. 
Sri Lanka's preferen tial trade regime has remained unchanged during the review period and it 
continues to provide long -standing reciprocal preferences pursuant to two bilateral agreements 
with India and Pakistan, and two regional trade agreements – the Asia -Pacific Trade Agre ement 
(APTA), and the South Asian Free Trade Area (SAFTA) Agreement. Developments during the 
review period included the launch of free trade negotiations with China and the deepening of the 
bilateral relationship with India. There is no doubt that widening  the scope of preferential trade 
agreements and deepening the existing bilateral arrangements will enhance market access for 
Sri Lanka's exports.  
3.13.   On investment regime, it is noted that since the end of the internal conflict, Sri Lanka has 
recognized the im portance of rebuilding the economy and establishing an attractive environment 
for foreign direct investment (FDI). As part of its Vision of 2010, it was recognized that FDI would 
be an important avenue to bring new technology and development in Sri Lanka. In this connection, 
Sri Lanka has strived to implement various policy measures aimed at attracting FDI. For instance, 
the One -Stop-Shop (OSS) has been formally established to expedite the investment approval 
process. However, FDI has not reached desired le vels envisaged, and remains at about 2% of GDP 
and heavily concentrated in infrastructure development and tourism. Some recent government 
policies, such as restricting land purchases by foreigners and utilization of the "Underutilized Asset 
Act", adopted b y the parliament in November 2011 to expropriate companies and assets, may 
have sent mixed signals to foreign investors. In addition, Sri Lanka continues to restrict 
investments in key strategic sectors such as tea, coconut, communication and fishing. I am  sure 
Members would be interested to know if there are plans to liberalize these sectors including 
removing restriction on the sale of land to foreigners.  WT/TPR/W/119  • Sri Lanka  
 
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  3.14.   Sri Lanka is an active Member of the World Trade Organization (WTO) and has progressively 
and continu ously liberalized its market in order to integrate into the multilateral trading system. 
We welcome the fact that Sri Lanka granted MFN treatment to all its trading partners, made 
proposals to the Doha Development Agenda and participated actively in the re gular work of the 
Committees at the WTO. Most notable during the review period was the submission of many WTO 
notifications that pertained mainly to customs valuation, agriculture, import licensing, SPS, TBT, 
TRIMs and TRIPS which demonstrated that Sri Lan ka is committed to fulfilling its WTO obligations, 
including notifications.  
Trade Measures and Practices  
 
3.15.   On trade measures and practices, it is noted from the Secretariat report that the tariff 
regime remained relatively unchanged during the review period , with applied rates declining 
slightly from an average of 11.5% in 2010 to 10.3% in 2016. It is also noted that over 50% tariff 
lines are duty -free, about 20% tariff lines have a 15% duty, and 23% have a duty of 30%. The 
structure of applied MFN tariff co nsists of ad valorem  rates, specific and alternate rates. The 
specific and alternate rates consist of 4% of tariff lines, and in my observation, this can make the 
trade regime non -transparent, complex and unpredictable. I know Members would be interested t o 
know if there are plans to convert non-ad valorem  rates into ad valorem  in order to enhance 
transparency of the tariff regime. In addition to the tariff, it is noted that Sri Lanka applies a 
number of additional levies and charges which significantly inc reases the cost of importation as in 
some cases they can exceed 100% the C.I.F. Sri Lanka should therefore consider simplifying and 
rationalizing its tariff regime by limiting the number of rates to make import regime more 
transparent and predictable.  
3.16.   It is further noted that the applied MFN rate exceeded the bound rate for 132 lines in 2016, 
up from 103 lines in 2010. The products affected included, inter alia , tobacco products, alcohol, 
beverages, textiles, carpets and switches. Although the authorities h ave stated that this trend was 
as a result of reduction in the number of tariff bands from four to three in November 2015, it 
would be important for Members to know when corrective measures will be taken.  
3.17.   On customs procedures, I would like to commend Sri Lanka for the main developments that 
have taken place in terms of implementation of single window system in January 2016 and the 
ratification and subsequent notification of its acceptation of the WTO Trade Facilitation Agreement. 
Sri Lanka has also notifie d its Category A commitments which identified 11 provisions for 
implementation upon entry into force of the Agreement.  
Sectoral Performance  
 
3.18.   Regarding Sri Lanka's sectoral performance, most developments during the review period 
were witnessed in the servi ces sector which dominates the economy and accounts for around 60% 
of the GDP and is responsible for around 45% of employment. For instance, in the tourism sector, 
developments during the review period included the launching of a new policy and strategy fo r the 
sector, aligning regulations with international standards, and establishing a "One Stop Unit" for 
investment in tourism. In the financial sector, a number of regulatory policies were introduced to 
strengthen the management of the sector which contrib uted to the growth and stability of the 
financial sector. The insurance subsector has undergone substantial liberalization and deregulation 
which has contributed to its expansion, reaching a growth of 15.12% in total premiums in 2015. 
Although there was no  major liberalization in the telecommunication, the sector continued to 
experience significant growth during the review period, mainly due to growth in the mobile 
telephone subsector. There were also developments in the transport sector particularly in bot h 
ports and roads in terms of new investments aimed at improving infrastructure. The reforms being 
undertaken in the services sector are commendable and it is important that Sri Lanka sustain the 
reform process and increase public investments in order to r ealize the full potential of the services 
sector. Sri Lanka should also diversify its services sector in order to minimize the risk of reliance 
on a few services sectors.  
3.19.   The agriculture sector remains an important contributor to the economy. According to the 
Secretariat report, it accounted for 8.7% of the GDP and about 28% of the total employment in 
2015. Unfavourable weather conditions pose a major challenge to the growth of the agriculture 
sector as it impacts negatively on many commodities. However, th ere is scope for Sri Lanka to WT/TPR/W/119  • Sri Lan ka 
 
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  increase agricultural productivity through upgrading of technology in addition to reviewing land use 
and crop -mix policies.  
3.20.   Manufacturing sector continues to play a significant role in the economy and trade, 
contributing for n early 20% of GDP and about one fourth of total exports. Manufacturing activities, 
however, are concentrated in a few sectors – textiles and clothing sector, rubber and plastic sector 
and food and beverage sector. As part of Sri Lanka's 2010 Government deve lopment policy, 
"Mahinda Chinthana  – Vision for the Future", the Government set priorities for the industrial sector 
in which it planned to promote diversification and encourage high -valued added production for the 
sector. However, according to the Secreta riat report, due to financial and technological constraints, 
the progress has been too slow to make a significant impact in the industrial structure of the 
country. Sri Lanka should strive to implement its industrial policy in order to bring desired change s 
to the sector. Aid for trade can play an important role in addressing some of the challenges that 
faces the industrial sector.  
3.21.   In conclusion, I believe that my comments will be useful in promoting fruitful and 
constructive discussions on trade policies a nd practices of Sri Lanka. There is no doubt that some 
positive developments have taken place in a number of areas during the review period and the 
Government of Sri Lanka is on the right path in undertaking appropriate steps aimed at propelling 
the countr y to the category of upper -middle income countries. I thank you all for your attention.  WT/TPR/W/119  • Sri Lanka  
 
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  4  STATEMENTS BY MEMBER S 
EUROPEAN  UNION  
4.1.  As acknowledged by both reports, Sri Lanka has performed economically relatively well 
during the review period maintaining an aver age annual growth rate in real GDP terms of 6%, 
despite the external pressure arising from the global economic slowdown and the domestic 
economic challenges.  
4.2.  The EU commends the progress made by Sri Lanka following the elections last year and 
welcomes in particular the implementation of an ambitious reform agenda that has allowed Sri 
Lanka to make improvements in many areas, including on governance and rule of law.   
4.3.  From the reports, we also learn that trade has played and is bound to play an important ro le 
in the economy. With this in mind, the EU is following with interest the process of reorientation of 
the economy launched by the Government in 2015, which took Sri Lanka on a path of sound, 
dynamic and more open economic policy. In particular, the EU we lcomes the Government's policy 
statement presented at the end of last year, announcing Sri Lanka's commitment to carry out 
reforms to its national trade policy aimed at encouraging investment and facilitating trade, which 
in turn will lead to the economic diversification Sri Lanka is seeking.  
4.4.  The EU praises Sri Lanka's engagement in the WTO and, in particular, commends Sri Lanka 
for not only having ratified the Trade Facilitation Agreement but for having promptly submitted its 
category A commitments notifi cation.  
4.5.  The EU enjoys a strong relationship with Sri Lanka. We have a Partnership Agreement on 
Cooperation and Development that dates back to 1995 and there was a recent important visit of 
Sri Lankan Prime Minister to Brussels.  
4.6.  While trade volume is rela tively small in size, Sri Lanka remains an important trading partner 
for the EU. The EU is the number one destination for Sri Lankan exports, accounting for 27% of 
the total trade of Sri Lanka. In 2015, the total trade in goods between the EU and Sri Lanka  was 
€4.7 billion with a €0.5 billion surplus for Sri Lanka.  
4.7.  We heard the call of Minister on GSP+ status. In July 2016, Sri Lanka submitted its new 
application to EU preferential treatment under the GSP+. The EU is well aware of the economic 
importance f or Sri Lanka of being granted GSP+, considering that well over 80% of Sri Lanka's 
exports would be eligible for such preferences. The EU is currently conducting a technical 
assessment of the application and will inform Sri Lanka of its intentions by the en d of November. A 
final decision will be taken by the EU at the very latest by mid -May 2017.  
4.8.  The EU is committed to supporting Sri Lanka on its path to inclusive growth and sustainable 
development also through development assistance. The EU and its Member S tates continue to be 
collectively a leading grant donor to Sri Lanka. During the period 2005 -2015, the EU provided 
close to €500 million in grants and €250 million in concessional loans to Sri Lanka. The allocation 
for the EU -Sri Lanka bilateral developmen t assistance for 2014 -2020 amounts to €210 million. 
Additional funds are available from other EU instruments, including Trade Related Assistance 
currently amounting to €8 million.  
4.9.  The EU welcomes the course Sri Lanka has taken in the developments of its t rade policy. I 
would only address a couple of issues of concern.  
4.10.   The EU's main concern regards the excise duties on large -engine vehicles that may go up to 
700% of the value of the actual manufacturer's price for a 3500 cc engine, or 400% for a smaller 
engine size vehicle of 1999 cc. While these excise duties are not discriminatory per se, as they 
also affect domestic producers, the EU considers that such excise duties are prohibitive and act as 
a deterrent to potential customers.  
4.11.   Second, the EU acknowledge s the positive developments in terms of customs procedures 
that occurred during the period under review and praises Sri Lanka for having already 
implemented a single window system in this context. However, as regards the WTO Customs WT/TPR/W/119  • Sri Lan ka 
 
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  Valuation Agreement (CV A), the EU would like to encourage Sri Lanka to make an additional effort 
to lift burdensome requirements for business.  
4.12.   Sri Lanka, in its report, concludes that the country is poised towards becoming a geo -
economic hub in the Indian Ocean. The EU hopes th at this review will help Sri Lanka in its 
endeavor and remains committed to continue supporting Sri Lanka's efforts to face socioeconomic 
challenges.  
CANADA  
4.13.   This review comes at an opportune time. The Government of Sri Lanka has demonstrated its 
intent to pursue meaningful economic reforms. In July, the World Bank provided Sri Lanka with a 
$100 million credit facility to reduce obstacles to private sector competitiveness, establish 
transparent, well -managed public institutions and improve fiscal sustainabil ity. Indeed, the World 
Bank has called on Sri Lanka to move from a public sector -driven economy to one that can 
harness the full potential of private -sector dynamism.  
4.14.   If successfully implemented, these reforms should help release untapped potential in the  
Sri Lankan economy. Indeed, Sri Lanka's average annual growth rate was a commendable six per 
cent during the review period, mainly attributable to expansion within the construction, wholesale 
and retail trade, and financial services sectors.  
4.15.   Recently, th e country's precarious financial situation has created headwinds to growth. In 
May, Sri Lanka received an IMF bailout to help meet short -term debt repayments. While this 
relieved pressure in the short -term, Sri Lanka must continue to work to narrow its bud get deficit in 
order to provide long -term economic stability and predictability for businesses, and thereby to 
achieving its full potential for growth.  
4.16.   Another important characteristic of a stable business environment, for both exporters and 
importers, is transparency in government decision -making and use of public resources. On 
Transparency International's Corruption Perception Index, Sri Lanka ranks 83 out of 168 countries. 
Clearly, there is room to improve. In this spirit, a transparent, rules -based, pro curement system 
will promote confidence in the use of public resources. Canada looks forward to receiving more 
information about Sri Lanka's intent to implement to Central Procurement Agency as outlined in its 
2016 national budget.  
4.17.   Positively, Sri Lanka's ranking in the World Bank's ease of doing business assessment rose 
in 2016 to 107, up six positions from its 2015 rank, with improvements in ease of starting a 
business, dealing with construction permits and obtaining electricity. Canada encourages Sri Lan ka 
to continue making the changes necessary to maintain a predictable and stable business 
environment. Sri Lanka also took an important step in this regard by ratifying the WTO's Trade 
Facilitation Agreement in May 2016.  
4.18.   Canada is mindful of Sri Lanka's o ngoing efforts to review its macroeconomic policies and to 
formulate a new agricultural policy with the goal of making the country self -sufficient in a number 
of primary commodities by 2018 and transforming the sector from subsistence farming to 
agribusine sses with export market potential by 2020. We trust that these reforms will be 
undertaken in as an inclusive manner as possible.  
4.19.   Our more specific questions and concerns are shared by a number of other Members in their 
submissions. These include important questions about Sri Lanka's Technical Barriers to Trade 
regime, including how technical regulations and conformity assessments are established; 
agricultural tariffs and their application, including with regard to special commodity levies; and 
regarding Sri  Lanka's plan to introduce a new Trade Regulation Act and how this proposed act will 
help facilitate trade.  
4.20.   Finally, Canada notes the important work being undertaken through the Standards and 
Trade Development Facility to improve the competitiveness of Sri  Lanka Spice and Fruit and 
Vegetable sectors. By developing a national standard on Good Manufacturing Practices in the 
cinnamon sector and ensuring proper training for operators along the value chain, Sri Lanka will be 
better positioned to achieving its go al of reversing the decline in cinnamon exports. Likewise, by WT/TPR/W/119  • Sri Lanka  
 
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  enhancing inspection and certification capacity of quarantine services and training farmers on good 
agriculture practices, the Fruit and Vegetable sector is better prepared to realize its export  
potential.  
4.21.   Canada is a committed partner in supporting Sri Lanka's economic development as it looks 
to continue capitalizing on the dividend of the peace reached in 2009. Sri Lanka has tremendous 
economic potential such areas as tourism, maritime industri es, renewable energy and 
infrastructure projects. Part of the challenge will be to develop these sectors sustainably and in 
line with the needs and expectations of citizens. Canada considers that sustainability encompasses 
social as well as environmental d imensions: for economic growth to be sustainable, the benefits 
must be shared inclusively. To this end, Canada has and will continue to invest in projects in 
Sri Lanka that will support inclusive economic development, including increasing the development 
of small -scale agricultural businesses as well as ensuring as greater economic opportunities for 
women.  
4.22.   In closing, it is clear that Sri Lanka has much to be proud of. While work is needed to 
address significant financial challenges, Canada encourages Sri Lanka to continue on a path of 
economic liberalization and to pursue the reforms necessary to allow private sector dynamism to 
drive economic growth. We recognize that this is not always an easy path to follow – Sri Lanka can 
count on Canada's support thro ugh these reforms.  
AUSTRALIA  
4.23.   Australia applauds the ongoing economic reform agenda adopted by Sri Lanka during the 
period of review.  
4.24.   Australia congratulates Sri Lanka on its impressive GDP growth, averaging 6.4% over five 
years (2010 -2015).  
4.25.   But we note su staining this will require a strong focus on macroeconomic stability, removing 
barriers to trade, high and sustained investment in infrastructure and human capital, and 
continued progress in fiscal consolidation and debt reduction.  
4.26.   Australia commends Sri L anka's efforts to attract foreign investment, including the 
introduction of a single electronic gateway for exports and imports, simplifying the tariff structure, 
and eliminating quantitative restrictions.  
4.27.   We encourage Sri Lanka to stay the course of deliv ering ongoing economic, trade and 
structural reforms.  
4.28.   Obstacles to foreign land ownership, rigid capital controls, and an unpredictable tariff 
regime remain barriers to further Australian trade and investment in Sri Lanka.  
4.29.   We also encourage the Government  to continue to push for State Owned Enterprise (SOE) 
reform, and private sector competitiveness.  
4.30.   As part of this review, we hope to gain a greater understanding of Sri Lanka's ambition for 
its agriculture sector – particularly plans to transform the sect or to an agribusiness export industry 
by 2020.  
4.31.   We are also particularly keen to understand how Sri Lanka is seeking to balance revenue 
generation from tariffs and taxes on fine foods and alcoholic beverages; and encouraging the 
development of a cost -effect ive tourism sector.  
4.32.   Finally, we congratulate Sri Lanka for ratifying the Trade Facilitation Agreement in May.  
4.33.   This Agreement – when implemented – will strengthen global trade and economic growth; 
create jobs; and deliver substantial development benefits f or WTO Members, including Sri Lanka.  WT/TPR/W/119  • Sri Lan ka 
 
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  NEW  ZEALAND  
4.34.   The objective of the Trade Policy Review Mechanism is "to enable a multilateral assessment 
of the effects of policies on the world trading system."1 It is in this context that New  Zealand sees 
these process es as a key opportunity for WTO Members to better understand other Members' trade 
policies, including the effects of these policies on the world trading system. We believe that 
Members need to use these reviews in the way that Ministers intended when they concluded 
Annex  3 of the Marrakesh Agreement . It is this perspective which has informed New  Zealand's 
comments and observations in this Trade Policy Review of an important bilateral partner.  
4.35.   New Zealand is encouraged by Sri Lanka's steady economic perform ance since its last 
review in 2010. The national reconciliation process, constitutional reform and policy aimed at 
reconstruction and growth have set Sri Lanka on a good track. Trade has demonstrably had an 
important role in Sri Lanka's economy, although i ts increase in recent years has been outpaced by 
Sri Lanka's growth in GDP. This shows there is still much to be taken advantage of by Sri Lanka in 
this space.  
4.36.   Sri Lanka has benefited from its emphasis on structural economic reforms, including in 
terms of  trade policy. These have placed Sri Lanka well to further its economic development and 
New Zealand welcomes Sri Lanka's stated intention to undertake further action.  
4.37.   New Zealand welcomes Sri Lanka's key priorities to renegotiate existing trade agreements , 
adopt an export promotion strategy, encourage more foreign direct investment, and promote the 
diversification of exports. These measures and the maintenance of a transparent and predictable 
trading environment will contribute to Sri  Lanka's continued gro wth, including through building 
conditions conducive to attracting foreign investment which taken together can be expected to 
have a positive impact on both poverty alleviation and broader development objectives.  
4.38.   In this regard, New  Zealand notes that the  use of mechanisms to encourage Sri Lankan 
export growth, such as Special Commodity Levies, in products including milk powder, has broader 
systemic implications. Needless to say these should be administered in a non -discriminatory way 
so as not to restrict  importation of these same products. New  Zealand also encourages Sri Lanka 
to ensure that any financial assistance provided to the fishing industry does not contribute to 
over-capacity or overfishing.  
4.39.   Reciprocal Prime Ministerial visits between Sri Lanka a nd New  Zealand in 2016 underscored 
the importance of greater trade and investment to increased prosperity. Agricultural cooperation 
was noted to be an important facet of the commercial relationship between Sri Lanka and 
New Zealand; cooperation which is un derpinned by mutually compatible trade policy.  
4.40.   New Zealand welcomes the quality products that are traded between New  Zealand and Sri 
Lanka, such as Sri Lankan tea and cinnamon and New  Zealand dairy products. New Zealand 
appreciates the progress that Sri La nka has made in reducing its dairy tariffs and encourages 
Sri Lanka to take the remaining steps necessary to bring its applied tariffs back in line with its 
WTO bindings as a priority.  . 
4.41.   New Zealand emphasises the importance of trade liberalisation for the  effective functioning 
of the WTO rules -based trading system.  New Zealand welcomes Sri Lanka's active role in WTO 
negotiations, as a fellow WTO member who relies on international trade in agricultural products for 
its prosperity and in this regard we join others in encouraging Sri Lanka to update its 
agriculture -related notifications in line with the commitments established through the Agreement 
on Agriculture.  
4.42.   We congratulate Sri Lanka on its selection to be the Coordinator for the Asian developing 
Member s group in the WTO for the year 2016. We note the importance of this position, including in 
terms of encouraging the implementation of the Ministerial decisions of the Ninth and Tenth WTO 
Ministerial Conferences in Bali and Nairobi respectively, and contin uing to address the ongoing  
                                                
1 https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm11_e.htm  accessed on 
29 September  2016.  WT/TPR/W/119  • Sri Lanka  
 
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  issues relating to agriculture, Non -Agricultural Market Access (NAMA) and services. New  Zealand 
continues to appreciate working with Sri Lanka in its capacity as Coordinator.  
4.43.   New Zealand also notes that Sri Lanka has participate d as an observer to the WTO 
Agreement on Government Procurement (GPA) since 2003. In this respect, New  Zealand continues 
to encourage Sri Lanka to align its policies with the GPA's non -discrimination principles.  
4.44.   We further note the positive reforms in the energy sector and the structural and taxation 
reforms the government of Sri Lanka is taking, particularly with respect to the reform of fossil fuel 
subsidies. This is a very positive development and we encourage Sri Lanka to share with Members 
its experien ce of such reform, including perhaps in the Committee for Trade and the Environment. 
In the meantime, we also encourage Sri Lanka to continue these important reforms. The removal 
of fossil fuel subsidies helps levels the playing field for investment in and  uptake of renewable 
energy and associated technology. Such measures will support implementation of Sri Lanka's 
Energy Empowered Nation development plan.  
4.45.   New Zealand appreciates Sri Lanka's continued commitment to the multilateral trading 
system and we we lcome the positive steps that Sri Lanka has taken in the six years since the last 
TPR. 
BRAZIL  
4.46.   Brazil congratulates Sri Lanka for its strong economic performance during the period under 
review. As mentioned in the report by the Secretariat, despite external  chocks such as the global 
financial crisis, Sri Lanka's GDP expanded on average by 6% per year in real terms during the 
period 2011 -2015. Moreover, the GDP per capita grew more than 25%.  
4.47.   In Sri Lanka's last Trade Policy Review, our delegation noted with g reat satisfaction the end 
of the internal armed conflict in May 2009. This circumstance provides a much needed opportunity 
to step up economic and institutional reforms to foster the consolidation of the process of national 
reconciliation. Today, Brazil co ngratulates Sri Lanka for having taken this opportunity, 
implementing prudent macroeconomic policies that resulted in the curbing of inflation. Indeed, 
inflation declined from 7.5% in 2012 to less than 1% in 2015. Those are encouraging 
achievements in the generation of a stable economic environment, a crucial enabling condition for 
the acceleration of development. We would like, therefore, to recognize and commend Sri Lanka 
for its efforts to implement sound policies so as to guarantee fiscal, monetary and financial 
discipline. We recommend the Sri Lankan Government to persevere in its efforts to improve 
transparency with the creation of an open business environment.  
4.48.   We would also like to highlight and praise Sri Lanka for the ratification of the WIPO 
Marrak esh VIP Treaty, which is an enabling legal instrument for the international cooperation on 
the access to culture for blinds, visually impaired or otherwise print disabled persons. The 
implementation of the Marrakesh VIP Treaty is a high priority for the Br azilian Government and we 
are looking forward to establishing international networks that can provide accessible reading 
material for those that need them the most.  
4.49.   Bilateral trade flows have more than doubled from 2011 to 2015, even though from a 
relative ly modest basis. In 2015, bilateral trade totaled US$169 million. Brazilian exports were 
concentrated in sugar. Sri Lankan exports, for their turn, were concentrated in rubber and textiles. 
The relations between our countries continue to prosper in a const ructive and open way, as 
demonstrated by the growing flows of bilateral trade, but it is our view that there is still much 
room for improvement. Trade between Sri Lanka and Brazil is yet much below its potential. We 
envisage a growing possibility of doing business on ethanol production from sugarcane and in 
airspace industry products. We stand ready to do the utmost to work in this direction and intensify 
bilateral trade in co -operation with the Sri Lankan authorities and businessmen.  
4.50.   My delegation thanks S ri Lanka for the reply to the question raised by our delegation.  WT/TPR/W/119  • Sri Lan ka 
 
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  SINGAPORE  
4.51.   Singapore and Sri Lanka enjoy a robust trade relationship. Bilateral trade was worth more 
than S$2 billion last year. We believe that bilateral co -operation will continue to grow, especially 
with the recent launch of the Sri Lanka -Singapore Free Trade Agreement (SLSFTA negotiations in 
July. The aim is to conclude a modern, comprehensive and high quality Free Trade Agreement 
which complements efforts to boost our respective economies . 
4.52.   Sri Lanka's economic reform taken during the period under review has borne fruit. This is 
evidenced by the impressive annual GDP growth rate of 6%. We note Sri Lanka's commitment 
towards the sustained long -term growth of its economy, as demonstrated by i ts efforts to diversify 
exports, reduce reliance on agriculture and develop its services and industrial sectors. Sri Lanka's 
ongoing modernization of its customs regime is also commendable. For example, a single window 
system was implemented in January thi s year, which allows for the submission of information to a 
single electronic gateway and the use of electronic funds transfer or online payments.  
4.53.   We are concerned that the number of applied tariffs exceeding bound rates has increased 
from 103 to 132 lines  since the last review. We call upon Sri Lanka to bring its tariff regime into 
conformity with its WTO commitments as soon as possible. This will bring greater predictability to 
trade.  
4.54.   Sri Lanka is to be commended for having regularly notified its measures . We welcome 
Sri Lanka's recent ratification of the Trade Facilitation Agreement (TFA) and its acceptance of the 
Protocol amending the TRIPS Agreement last year. We express our appreciation to Sri Lanka for 
having taken on the coordinator role of the Asia -Pacific Group of Developing members.  
4.55.   We thank Ambassador Susiri Kumararatne and his delegation in Geneva for the close 
cooperation between our two delegations.  
REPUBLIC  OF KOREA  
4.56.   Korea and Sri Lanka have a long history of bilateral economic relationship. Th e bilateral 
trade reached US$362 million in 2015. Korean companies and business people have been the 
leading foreign investors in Sri Lanka. Although the FDI by Korea to Sri Lanka has been somewhat 
decreased recently, Korea hopes that its economic partners hip with Sri Lanka will continue to grow 
and develop in the future.  
4.57.   Turning to Sri Lankan economy's overall performance, I wish to note that, as the Secretariat 
report mentioned, it has been successfully overcome the global crisis and has kept growing. Aft er 
the financial crisis, Sri Lanka demonstrated its economic resilience, with an average annual growth 
rate in real GDP of 6% during the review period. Inflation has been also well controlled, thereby 
declining from 7.5% in 2012 to less than 1% in 2015.  
4.58.   On the other hand, as the Secretariat report also says, the role played by trade has been 
reduced in the economy, as trade in goods and non -factor services declined from the equivalent of 
about 55% of GDP in 2011 to 49% in 2015. While Korea would like to app reciate Sri Lanka for 
trying not to resort to protectionist measures and for remaining unchanged in general, despite 
harsh circumstances surrounding the Sri Lankan economy, at the same time, we would like to 
request the Sri Lankan Government to take more o pen policies in regard with trade. Its MFN tariff 
rates are still high, particularly in the agricultural sector, which is 24%. There is room for growth in 
services trade. In addition, we believe that the diversification of expert sectors and the 
simplifica tion and elimination of additional levies and charges on a variety of export and import 
products would substantially contribute to the growth of trade in Sri Lanka.  
4.59.   After the resolution of the internal conflict, Sri Lanka has become more attractive to fore ign 
investors. The Government also recognizes the importance of FDI. However, FDI levels remain 
relatively low, and in 2015, FDI inflows declined and stood at about 2% of GDP, which is below the 
Government's target of 3% of GDP. Korea would like to request  Sri Lanka to create a better 
investment environment, by eliminating or modifying potentially investment -restrict policies and 
legal measures, including land ownership restrictions.  WT/TPR/W/119  • Sri Lanka  
 
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  4.60.   Another thing Korea is concerned about is, as many of the previous speaker s pointed out, 
the chronic fiscal deficits experienced by Sri Lanka. Since it is closely related to its trade policy and 
performance in general, Korea is very concerned about it. In this regards, we re -submitted the 
same questions on Sri Lanka's fiscal pol icy, which were raised by Korea in 2010. In this regards, I 
very much appreciate Sri Lanka's response to Korea's advanced written questions, including the 
one, related to fiscal deficit, and we will carefully review the response later.  
4.61.   It is also our hope  that Sri Lanka will continue to actively participate in helping strengthen 
the WTO multilateral trading system, guided by its rehabilitation programmes as Minister Rishad 
Bathiudeen mentioned in his opening remarks, as well as the long -term strategic blue print, the 
2010 "Mahinda Chinthana – Vision for the Future" which include many key elements for economic 
growth and trade promotion. With this, I would like to conclude by expressing my sincere 
appreciation to the Sri Lankan delegation for its hard work an d wish Sri Lanka every success in its 
fourth TPR.  
CHINA  
4.62.   Sri Lanka has maintained a robust growth of 6% in average from 2011 to 2015, and trade 
has continued to play a vital role in its economic development. During the period under review, 
important efforts  have been made by the government of Sri Lanka to liberalize its trade and 
investment regime, with a vision to build Sri Lanka as the trading hub in the South Asian region. 
The TFA ratification of Sri Lanka this year, in which 11 provisions are identified in category A, is a 
good demonstration of their strong commitment to trade liberation. Additionally, Sri Lanka has 
launched FTA negotiations with China in 2014, we hope this FTA could be successfully concluded 
as early as possible, and bring benefits to th e people from both countries.   
4.63.   Sri Lanka is a staunching supporter of the multilateral trading system, and an active 
participant in the DDA negotiations. We highly commend the role of our Sri Lanka colleague here 
in Geneva, and look forward to working mor e closely with them in the future.  
4.64.   On the bilateral front, China and Sri Lanka maintained sound economic and trade 
cooperation. Bilateral trade is increasing rapidly in the review period, and China has become 
Sri Lanka's second largest trading partner and  third largest source of foreign investment. Our 
statistics showed that the bilateral trade between China and Sri Lanka reached US$4.6 billion last 
year, and continued to grow by 6% in the period between January and August this year. 
Investment from China to Sri Lanka is also accelerating our accumulated investment in Sri Lanka 
reached US$890 million by the end of last year, and between January to August this year, new 
investment from China has increased 70% on a year -to-year basis. Moreover, China is Sri L anka's 
largest tourist source today. From January to August this year, nearly 200,000 Chinese tourists 
have arrived in Sri Lanka, a 32% increase from the same period last year.  
4.65.   Looking ahead, China is willing to step up a more comprehensive cooperation wi th Sri Lanka 
within the framework of the Belt and Road Initiative, and ready to promote the bilateral ties to a 
new level.  
4.66.   China has posed some written questions to Sri Lanka for clarification, and is grateful for the 
replies received, which we will study  closely.  
UNITED  STATES  
4.67.   I would like to begin by expressing my Government's best wishes for the Government of 
Sri Lanka. Under President Sirisena, your commitment to human rights, democracy, and the rule 
of law is noted and greatly appreciated. We also not e your Government's commitment to the 
progressive adoption of world class trade and investment rules.  
4.68.   This review comes at a historic moment for Sri Lanka. With the end of a long civil war and a 
renewed commitment to democratic values, we see opportunity f or prosperity to regain and 
consolidate its foothold in your nation. With enlightened governance, sound economic policies, and 
peace, we see a bright future for all Sri Lankans.  WT/TPR/W/119  • Sri Lan ka 
 
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  4.69.   Sri Lanka's high literacy rates, well established export industries, and commi tment to 
economic reform provide strong potential for much higher growth rates and employment creation. 
In traditional exports like apparel and agricultural products, there is ample room for growth by 
moving up the value chain. A small but rapidly growing IT sector oriented to entrepreneurship 
promises to complement these existing export giants. Also, with peace restored, tourism has 
boundless potential. Finally, Sri Lanka is well placed in its ambition to become a regional services 
hub. 
4.70.   The United States a nd Sri Lanka have an expanding trade relationship totaling 
US$3.25  billion in two -way trade in 2015. The United States remains Sri Lanka's largest 
single -country market.  
4.71.   We would like to underscore our regard for Sri Lanka's commitment to principles of 
openness to international trade and an investor friendly climate. In particular, we laud Sri Lanka's 
goal to adopt world -class trade and investment standards – the first South Asian country to make 
such a commitment. With this in mind, we note, however, the S ecretariat's observation of the slow 
pace of implementation of trade and investment reforms. Sri Lanka has made substantial use of 
import surcharges and other charges applied mainly on imports. We continue to hope that the 
government's commitment to econom ic reform and its desire to establish Sri Lanka as a regional 
services hub – which will require expedited movement of goods, services and workers into and out 
of the country - will provide increasing opportunities for Sri Lanka to reduce the barriers to 
imports.  
4.72.   We hope, too, that Sri Lanka is bearing in mind the benefits to its trade that can result from 
binding a greater number of its tariff lines beyond the current 36.4%. The binding of tariff lines 
makes trade more predictable for your domestic industri es that require inputs at the lowest cost.  
4.73.   The Secretariat report further notes that other charges can considerably increase the cost of 
imports into Sri Lanka. Eliminating or significantly reducing such charges would also enhance 
predictability and afford ability of inputs for competitive domestic consumption and production. We 
also hope that the Government will take care to abide by WTO rules when modifying its tariffs. 
Here, I must mention our concern about some applied tariff lines that apparently exceed  their 
bound rates.  
4.74.   Exporters of non -traditional goods exporting at least 80% of their production enjoy a 
number of tax concessions. We would like to know Sri Lanka's rationale for such concessions not 
only in light of its WTO commitments but also in terms  of the economic and trade distortions that 
these can create.  
4.75.   We are pleased to acknowledge an important policy development that has taken place since 
Sri Lanka's last Review. Sri Lanka's legislation implementing the WTO Customs Valuation 
Agreement (CVA) i s a major step forward. According to the Secretariat, however, that legislation 
grants the authorities the flexibility to depart from CVA rules when deemed necessary, in the 
interest of the national economy or for any other reason, allowing for the use of minimum values. 
During the period under review, the Secretariat points out, Sri Lanka has applied such minimum 
import prices when calculating import taxes applied to used cars. We are disappointed that 
Sri Lanka's implementation of this important agreement  has taken this turn and would like to know 
what options Sri Lanka may be considering to mitigate this unfortunate legislative outcome.  
4.76.   The Secretariat report notes that the Government of Sri Lanka remains determined to 
reduce further the list of sectors i n which foreign investment is restricted. We also note that many 
restricted sectors may be open to specific projects, depending on a case by case review. We 
welcome this flexibility and other approaches to open the economy. Another positive step would be 
for the government of Sri Lanka to decide to participate in the Agreement on Government 
Procurement. Also, to promote a positive climate for business and economic growth, we encourage 
the efforts by Sri Lanka to address governance issues, including strength ening the rule of law and 
combating corruption.  
4.77.   We hope that this trade policy review will help us to understand more clearly the ways in 
which Sri Lanka is addressing the important issue of protection of intellectual property rights. We 
believe that more can be done, particularly in the area of enforcement.  WT/TPR/W/119  • Sri Lanka  
 
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  4.78.   Finally, the United States will continue to work with Sri Lanka to strengthen and deepen our 
relationship. Recent political changes in Sri Lanka have dramatically increased the scope for 
bilateral coope ration and we are taking full advantage of that in our greatly expanded development 
assistance programs. We look forward to working with Sri Lanka as we implement our bilateral 
5-year Joint Action Plan to Boost External Trade and Investment. We are confide nt that this Plan 
will serve as a road map to higher growth, employment generation, increased opportunities, and 
higher living standards for the people of Sri Lanka.  
MALAYSIA  
4.79.   Sri Lanka showed a resilient growth throughout the review period maintaining an a verage 
annual growth rate in real GDP of 6%. This was driven by construction, wholesale and retail trade, 
and the financial services sectors. However, we also note that during the review period, trade in 
goods and non -factor services declined from the equi valent of about 55% of GDP in 2011 to 49% 
in 2015. This indicates that Sri Lanka is no exception to the global economic trend.  
4.80.   Malaysia and Sri Lanka have had long -standing bilateral trade relations. Total trade between 
the two countries stood at US$570 mi llion in 2015, a contraction from US$722 million in 2014. 
Total exports of Malaysia to Sri Lanka was valued at US$481 million, while imports increased by 
82% to US$90 million.  
4.81.   Malaysia welcomes efforts by Sri Lanka in focusing on long -term strategic and st ructural 
development since the end of its internal conflict. Nevertheless, much can be done to ensure that 
the investment regime facilitates and provides a more conducive environment for potential 
investors.  
4.82.   Sri Lanka has been an attractive FDI destination  due to the many incentives in place for 
investments. According to Board of Investment data, since 2011, FDI inflows have been growing 
steadily and reached US$1.6 billion in 2014, while the stock of FDI in 2014 stood at almost 
US$10  billion. We note that, based on the Secretariat report, Malaysia is among the largest 
investors in Sri Lanka, along with the United Kingdom, China, India and Hong Kong, China. 
Malaysia's key investments are in property development, construction, power and 
telecommunication among  others. As such, it is certainly important for us to work closely with 
Sri Lanka in improving investment facilitation that would benefit all sides.  
4.83.   To further enhance Malaysia -Sri Lanka bilateral trade, Malaysia is pleased to highlight that a 
proposal has  been made last May, for an FTA between Malaysia and Sri Lanka. Both sides are 
studying closely the potentials in order to take the initiative a step further.  
4.84.   Malaysia appreciates Sri Lanka's effort at the multilateral front. We welcome efforts to 
implemen t the expanded Information Technology Agreement which was ratified by Sri Lanka in 
May 2016. I take this opportunity to thank H.E. D.S. Kumararatne, Ambassador/Permanent 
Representative of the Permanent Mission of Sri Lanka to the WTO, for his dynamic role as the 
current Chairperson of the Asia Group. We appreciate him and his delegation's continuous 
engagement here with the other WTO Members.  
4.85.   Malaysia has submitted a few questions in advance of this meeting and welcomes the 
responses from Sri Lanka.  
4.86.   As high lighted earlier, with Malaysia's vast interest in Sri Lanka, any newly introduced 
policies, regulations as incentives would have an impact on our investment. We therefore, 
welcome updates from Sri Lanka on its new proposed Investment Act to replace the Str ategic 
Development Act.  
4.87.   We also note that Sri Lanka currently has no laws and regulations to address safeguard 
measures. However, there has been a proposal on a trade defense bills on anti -dumping, 
countervailing and safeguard measures submitted to Cabinet . For purpose of transparency, we 
encourage Sri Lanka to share updates on the new legislation.  
4.88.   We also look forward to obtaining additional information on the 23 Agricultural Development 
Mega Zone that Sri Lanka is proposing in making its agricultural prod ucts more competitive.  WT/TPR/W/119  • Sri Lan ka 
 
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  EL SALVADOR  
4.89.   Nos complace participar en este importante ejercicio del Examen de las Políticas 
Comerciales de Sri Lanka, a quien nos unen lazos diplomáticos y de amistad.  
4.90.   Sobre su desempeño económico, cabe destacar las muestras de res iliencia de la economía 
de Sri Lanka tras la crisis financiera mundial, la cual alcanzó una tasa media de crecimiento anual 
del PIB real del 6% durante el período examinado. El crecimiento se ha visto impulsado 
principalmente por los sectores de la constru cción, el comercio mayorista y minorista y los 
servicios financieros.  
4.91.   También se señalan las extensas reformas realizadas en el régimen de política comercial de 
este miembro desde el año 1977, las cuales han colocado al país en una posición firme en el pl ano 
del desarrollo económico.  
4.92.   Tal como se puede apreciar en el informe de Gobierno, dichas reformas también han 
contribuido a los importantes logros alcanzados en el plano del desarrollo social; alcanzando 
avances importantes con relación al cumplimiento de las metas de los Objetivos de Desarrollo del 
Milenio establecidas para el 2015.  
4.93.   El comercio continúa desempeñando un papel importante en la economía de Sri Lanka, 
representando alrededor del 49% del PIB en el año 2015. Al igual que El Salvador, una par te 
importante de las exportaciones de Sri Lanka se concentran en productos agrícolas y prendas de 
vestir, y esto en sí es un reto para nuestros países, el de la diversificación de productos y 
mercados.  
4.94.   Es por lo anterior que El Salvador y Sri Lanka trabaj an de cerca en diversos temas que se 
discuten en el marco de la OMC promoviendo los intereses de los países en desarrollo en diversas 
áreas de negociación, a través de su participación en agrupaciones tales como el G -33 y el Grupo 
de Economías Pequeñas, Vu lnerables.  
4.95.   Tal como se indica en el informe de la Secretaría, Sri Lanka ha presentado diversas 
propuestas en el marco de las negociaciones y ha participado en la labor ordinaria y los Comités de 
la OMC. Por otro lado, se destaca la transparencia de este m iembro quien ha presentado 
numerosas notificaciones durante el período examinado, principalmente en materia de valoración 
en aduana, agricultura, trámite de licencias de importación, Medidas Sanitarias y Fitosanitarias, 
Obstáculos Técnicos al Comercio, ent re otros. No menos relevante es el importante paso de 
depositar su instrumento de ratificación del Acuerdo de Facilitación del Comercio.  
4.96.   Por lo anterior, aprovecho esta ocasión para agradecer al Embajador Kumararatne y a su 
equipo por activa participación  en los trabajos que se desarrollan en esta Organización, lo cual 
demuestra el firme compromiso de Sri Lanka con el Sistema Multilateral del Comercio.  
MONTENEGRO  
4.97.   Montenegro would like to associate itself with the statement of the European Union.  
4.98.   Monteneg ro would like to appreciate firm and continuous commitment of Sri Lanka to the 
multilateral trading system and it active and constructive engagement in the works of the WTO 
and effective cooperation with all Member states. We commend Sri Lanka for ratifyin g the TFA and 
for its contribution to the final negotiations resulting in strengthening of the WTO both in Bali and 
in Nairobi.  
4.99.   Montenegro wishes to congratulate the Government of Sri Lanka on its economic 
performance since its last review.  As the Secret ariat notes, the Sri Lankan economy has shown 
resilience in the aftermath of the global financial crisis and the resolution of internal conflict in 
Sri Lanka, with an average growth rate in real GDP of 6% during the review period. As the 
Secretariat furthe r notes, construction, wholesale and retail trade and financial services have 
driven this growth. Given the challenges that the world economy has faced during this period – 
and still faces – these statistics are impressive.  WT/TPR/W/119  • Sri Lanka  
 
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  4.100.   At the same time, however, Mont enegro notes the Secretariat's report that the main risks 
to growth and sustainability in Sri Lanka are result from the weak fiscal position – in particular, the 
fiscal deficit has increased from 6.5% of GDP in 2011 to 7.5% in 2015, well above the Governme nt 
target of 4.4%. Montenegro hopes that notwithstanding such challenges, the Government of 
Sri Lanka can continue to improve on its excellent performance during the review period.   
4.101.   In this context, Montenegro will follow with interest developments pertai ning to the 
strategic key priorities of Sri Lankan Vision of the Future including its export promotion strategy, 
foreign direct investment and diversification of exports.  
4.102.   Although our two countries have a modest trade and economic relations, there has bee n 
an increase interest of Montenegro to Sri Lanka's focus and reliance on the services sector. 
Montenegro's economy is increasingly reliant on the service sector and tourism; and we regard the 
services sector as an area of important economic growth and sus tainability. My delegation notes 
that the services sector accounted for approximately 56.6% of Sri Lankan GDP in 2015 and that 
Sri Lanka has maintained an average growth rate in this sector of 7% over the period.  
4.103.   In addition, tourism has been a focus of t he Sri Lankan Government as a sector to expand 
the economy and invest in infrastructure. The sector has a significant impact on the economy 
contributing over 12% to the foreign exchange earned in 2015. Montenegro will continue to follow 
closely implementat ion of the new policy and strategy for this sector, aligning regulations with 
international standards, and establishing a "One Stop Unit" for investment in tourism.  
4.104.   Finally, Montenegro is looking forward to continuing excellent and constructive 
engagement  with the Sir Lankan in Geneva and my distinguished colleague Ambassador to the 
WTO, R.D. Susiri Kumararatne and his team.  
PAKISTAN  
4.105.   Sri Lanka is among Pakistan's main trade partner, we have a trade preferential agreement 
in force since 2005. Our two count ries are working together to further enhance bilateral trade and 
recently, efforts were directed towards an even more comprehensive economic partnership 
agreement (CEPA) that will include trade in services, investment and Customs cooperation. 
Pakistan inve stments in Sri Lanka are in the manufacturing and construction sectors, and the 
deepening of the comprehensive economic partnership agreement will further boost bilateral trade 
between our two countries. In January 2017, Trade Development Authority of Paki stan will hold a 
second edition of a single country exhibition in Sri Lanka.  
4.106.   The transition of Sri Lankan economy from a low income to a middle income was 
accompanied by some challenges, which the Government of Sri Lanka addressed with well 
targeted strat egies. We commend the bold steps taken by Sri Lankan Government in carrying out 
and in implementing strategic policies for growth such as the ones outlined in the Government 
2010 vision for the future. Remarkable performances have been achieved by Sri Lank a since the 
last review in 2010: the economy has grown at an average 6.4% between 2010 and 2015, both 
trade in goods and in Services recorded positive and strong growth. GDP per capita based on 
Power Purchasing Parity is continuing its increasing trend, in  2005 GDP per capita was around 
US$5'000 and by 2015 this amount has double to reach over US$10'000.  
4.107.   As a result of Sri Lankan economic development, it performed well in the Human 
Development Index in 2015, where Sri Lanka ranked 73rd, with the highest sco re in Human 
Development Index value in South Asian Countries. According to World Bank, Sri Lanka has 
comfortably surpassed most of the MDG targets set for 2015. Sri Lanka economic development has 
contributed to overcome successfully its human development c hallenges with a marked decline in 
poverty.  
4.108.   Furthermore, other international indicators such as the WEF global competitiveness index 
2016-17 ranked Sri Lanka as the second highest among South Asia Countries. The WEF Global 
Gender Gap report of 2016, ranke d Sri Lanka at 100th place out of 138 countries  
4.109.   Services sectors have made significant contribution to the economic growth of Sri Lanka. 
Reforms in Telecom sector has improved Sri Lanka ranking in WEF Network Readiness Index from WT/TPR/W/119  • Sri Lan ka 
 
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  76th out of 148 in 2014 t o 63rd out of 139 in 2016. UNCTAD B2C e -commerce index 2016 ranked 
Sri Lanka second highest in South Asia. Sri Lanka has the most affordable prepaid mobile and 
fixed broadband internet tariffs in the World. This is further confirmed in the 2016 World Bank 
report titled Digital dividends which indicates "If you want to make a mobile phone call, go to 
Sri Lanka".  
4.110.   We applaud the different reforms carried out in several key sectors to enhance growth and 
we would like particularly to highlight reforms made in t wo specific areas indicated by the World 
Bank in its October 2016 report: Starting a Business and Protecting Minority Investors. In the past 
five years, Sri Lanka has implemented the highest number of Doing Business reforms in the 
region, with 12 reforms i n total. As part of such reform, we commend Sri Lanka for ratifying the 
WTO Trade Facilitation Agreement.  
4.111.   At the WTO in Geneva, we highly appreciate the positive and active engagement of 
Sri Lanka via its Mission led by H.E. Ambassador Kumararatne, mainly  in Sri Lanka's role as the 
coordinator of the group of Asian developing countries, and for his close collaboration in Friends of 
Ecommerce for Development.  
INDIA  
4.112.   We would like to commend the Government of Sri Lanka for achieving sustained economic 
growth at an average rate of 6% from 2010 to 2015. The per capita income of Sri Lanka has also 
increased significantly from US$2744 in 2010 to US$3924 in 2015. The Secretariat report 
mentions that the main risks to growth sustainability and development in Sri Lan ka result from the 
weak fiscal position and resulting public debt over hang. The country also faces challenges relating 
to energy security, skill development gap, food security, low productivity and lack of diversification 
in the economy. We have noted tha t Government of Sri Lanka's long term strategic and structural 
development plans since the end of internal conflict in the country have borne results. We also 
appreciate the measures being taken by the Government of Sri Lanka to address the challenges by 
bringing fundamental challenges to tax policy and administration to boost revenues and public 
finances and efforts to boost exports and promote investment in the country.  
4.113.   India and Sri Lanka share centuries old ties of friendship and civilizational linkage s. Both 
countries are closely linked through geography, history, religion, language, culture and trade. In 
recent years, the relationship has further deepened and strengthened in all spheres with regular 
exchanges at the highest level.  
4.114.   India and Sri Lanka also share a close and vibrant economic and commercial partnership. 
India is Sri Lanka's largest trading partner and Sri Lanka is amongst India's largest trading partner 
in South Asia. The total trade between both countries in 2015 -16 stood at US$6.05 bill ion with 
exports from India amounting to US$5.30 billion and imports from Sri Lanka amounting to 
US$742  million. The India -Sri Lanka Free Trade Agreement which came into effect in 2000 
provides a framework for trade between both countries. In 2015, both co untries have mooted an 
Economic and Technological Cooperation Agreement covering trade in goods, services, 
investments, technology cooperation, capacity creation and other elements, which is under 
discussion. Bilateral investments are also on an upswing. I ndian companies are investing in 
Sri Lanka in the areas of petroleum, retail, IT, financial services, real estate, hospitality and 
tourism with cumulative investments for over US$1 billion. Similarly, Sri Lankan investments into 
India in the areas like gar ments, real estate, hospitality industry and the logistic sector are also 
growing.   
4.115.   India and Sri Lanka also have a multifaceted development cooperation partnership. Since 
the end of the internal conflict in Sri Lanka, the Government of India has put in p lace a robust 
programme of assistance to help the Internally Displaced Persons' return to normal life. Sri Lanka 
is one of the major recipients of development credit given by India with cumulative commitments 
of US$2.6 billion, including US$436 million as grants. Under development credit, major railway 
projects have been undertaken in Sri Lanka. Buyer credit agreements have also been signed for 
water supply and other projects. India is also working closely with the Government of Sri Lanka in 
other sectors a s well, including education, health, transport connectivity and capacity building.  WT/TPR/W/119  • Sri Lanka  
 
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  4.116.   To conclude, there is tremendous potential to further strengthen and take our bilateral 
relationship to greater height in all spheres. We also look forward to working with t he authorities 
of Sri Lanka in further expanding our trade and investment ties for mutual benefit.  
MAURITIUS  
4.117.   We wish to commend the efforts of the Government and People of Sri Lanka towards 
national reconciliation as a major step for restoring economic an d social normalcy. There have 
been notable initiatives to attract and bolster investment with a view to making Sri Lanka an 
important logistics and services hub in the region. We believe that focus on infrastructure 
development as well as continued improve ments in the political environment and security situation 
will enhance prospects for foreign direct investment and tourism.  
4.118.   Sustained economic growth rates, and macro -economic stability measures, will ensure that 
the Government of Sri Lanka delivers on the  inclusive trade agenda and achieve the Sustainable 
Development Goals.  
4.119.   Sri Lanka and Mauritius share the same characteristics, as Small and Vulnerable 
Economies and Net Food Importing countries. We also have similar objectives as regards 
broadening and div ersification of growth pillars. Agriculture, NAMA, the fisheries as well as the 
services sectors are key areas of interest in the WTO negotiations for both of our two countries.  
4.120.   As members of the Indian Ocean Rim Association, both Sri Lanka and Mauritius s hare the 
same vision and economic objectives to deepen intra -regional trade and improved trade facilitation 
measures so as to enable further trade in goods and services between our two countries.  
4.121.   The Mauritius delegation looks forward to working closely wi th the delegation of Sri Lanka 
and in various groupings, as we head to important discussions at the WTO with a view to reaching 
meaningful outcomes for MC11.  
GUATEMALA  
4.122.   Sri Lanka es un país multiétnico y multirreligioso, famoso por su producción de té, café  y 
caucho. Cuenta hoy con una economía industrial creciente, situación que ha permitido una 
importante mejora de su ingreso per cápita en las últimas décadas. Su belleza natural, diversidad 
de paisajes e invaluable patrimonio cultural, han convertido a Sri  Lanka en un destino turístico de 
gran reconocimiento a escala mundial.  
4.123.   Si bien el comercio entre Guatemala y Sri Lanka es reducido (en 2015 fue de alrededor de 
5 millones de dólares EE.UU.), nuestros países comparten un número importante de 
característica s, situación que nos ha acercado y permitido trabajar muy de cerca en el marco de la 
Organización Mundial del Comercio. Como parte del Grupo de Economías Pequeñas y Vulnerables, 
es importante resaltar la labor proactiva y dedicada que Sri Lanka ha proporci onado 
constantemente a nuestro Grupo.  
4.124.   En relación al examen que hoy nos concierne, destacamos la resiliencia de Sri Lanka frente 
a la crisis mundial y el crecimiento anual del PIB real del 6%, durante los años evaluados en el 
estudio. Asimismo, resaltamos el progresivo fortalecimiento institucional y las reformas 
estructurales emprendidas, tal como se refleja en el programa Mahinda Chinthana -Visión de 
Futuro, los esfuerzos por incrementar la atracción de inversión extranjera directa y las medidas 
para simpl ificar y hacer más eficientes sectores clave, como el de servicios financieros.  
4.125.   Observamos como retos a corto y mediano plazo, la profundización de los esfuerzos en pro 
de la simplificación de su sistema arancelario y tributario y el refuerzo y revisión de l marco jurídico 
de las empresas estatales, dado que sus obligaciones pendientes son equivalentes al 12% del PIB.  WT/TPR/W/119  • Sri Lan ka 
 
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  NEPAL  
4.126.   The circulated reports reveal that since the trade liberalization initiated in 1977, several 
trade policy reforms have been achieved, w hich have laid strong foundation on socio -economic 
development of Sri Lanka.  
4.127.   We are glad to disclose that Sri Lanka has performed relatively well since its last review in 
2010. Its economy has shown resilience following the initiatives of the internal conf lict, and 
gathered strength even in the face of the global financial crisis.  
4.128.   We appreciate that since its last review, the Government has been guided by its 2010 
"Mahinda Chinthana – Vision for the Future" which focuses on structural changes and sets out 
specific targets for GDP and export growth by reducing the reliance on agriculture and diversifying 
to other important areas like manufacturing and services.  
4.129.   The progressive and continuous liberalization of the market to integrate into the 
multilateral trad ing system, coupled with a commitment to fulfilment of WTO obligations, has 
made Sri Lanka a more reliable and predictable trading partner.  
4.130.   Relatively stable macroeconomic architecture of Sri Lanka remained supportive to 
increasing per capita income and ma intaining the economic growth at an average rate of 6% per 
year over the review period despite external pressure arising from global economic slowdown and 
other domestic economic challenges.  
4.131.   As close South Asian neighbour, Nepal and Sri Lanka are the membe rs of the Non -Aligned 
Movement (NAM), the South Asian Association for Regional Co -operation (SAARC) and the Bay of 
Bengal Initiatives for Multi -Sectoral Technical and Economic Cooperation (BIMSTEC).  
4.132.   We want to recall that two agreements to trade and air se rvice to link both countries were 
inked during President Mahindra Rajapaksa's state visit to Nepal in 2009. The improved air 
connectivity between the two countries has significantly contributed the increase of tourists to 
Nepal. Nearly 40 000 Sri Lankan to urists visit Nepal every year through the direct air link between 
Kathmandu and Colombo. Nepal and Sri Lanka can package their unique beaches and mountains 
and the complementary of cultural experiences for the growth and promotion of tourism within and 
into South Asia.  
4.133.   Nepal exports lentil, plastic, wood and charcoal, carpet, art, electrical machinery and 
equipment, sound recorder, television, etc. to Sri Lanka while Nepal imports from Sri Lanka mainly 
cocoa and cocoa preparations, coffee, tea, spices, elec trical machinery and equipment and so on. 
However, compared to the potentials for enhanced trade, investment and joint economic 
collaboration between two nations, there is much to do to seize the opportunity already available 
under South Asian Free Trade A greement (SAFTA) and BIMSTEC for enhanced trade flows between 
the two nations. We encourage wider exploration and larger awareness building by the Business 
Councils established between Nepal and Sri Lanka in stimulating the trade relations further.  
4.134.   Finally , it is appreciable that Sri Lanka is striving to reach the status of upper -middle -
income country focusing on long -term strategic and structural transformation of its economy. We 
wish Sri Lanka a success in this direction.  
JAPAN  
4.135.   We, Sri Lanka and Japan, ha ve been important partners for years. Japan is the third 
largest importer for Sri Lanka. Also, Japan has been one of the largest donors for years. Japan will 
make continuous efforts to maintain and further develop the strong ties between us.  
4.136.   Let me begin b y touching on the general economic situation. According to the Secretariat's 
report, the economy of Sri Lanka has been well since the last review. The country's average 
annual economic growth rate during the review period was over 6%. Moreover, Sri Lanka h as 
successfully maintained relatively low unemployment rate, and has reduced inflation rate to less 
than 1%. Those achievements are commendable.  WT/TPR/W/119  • Sri Lanka  
 
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  4.137.   Having said that, Japan believes Sri Lanka has problems with relatively weak fiscal 
position. In this regard, J apan is glad to read in the Secretariat's report that the Government is 
now undertaking a reform. Japan hopes that those efforts by the Government will have a fruitful 
outcome.  
4.138.   Let me turn to the country's trade policies.  
4.139.   According to the Secretariat's rep ort, Sri Lanka's primary objective of its trade policies is to 
renegotiate existing trade agreements including two bilateral agreements with India and Pakistan 
and two regional trade agreements. Furthermore, according to the report, Sri Lanka seems to have  
a clear intention to enter into negotiations with not only China and India but also the United 
States. Although it is unfortunate that there is no FTA currently in force between Sri Lanka and 
Japan, Japan positively evaluates the country's efforts toward trade liberalization through FTAs.  
4.140.   Apart from the FTAs, according to the report, Sri Lanka has a plan to enact the new Trade 
Regulation Act and replace the Imports and Exports (Control) Act. Japan requests Sri Lanka 
further explanations about this plan.  
4.141.   Now let me briefly touch upon the country's investment policies.  
4.142.   Despite the continuous efforts by the Government of Sri Lanka, the country is still a 
challenging place to do business. According to the recently published report by the World Bank, it 
ranked 1 10th out of 190 economies.  
4.143.   Sri Lanka has introduced several restrictions to foreign investment. Among others, Japan 
pays much attention to the land act of 2014 which prohibits the transfer of land to a foreigner. It 
seems to be difficult to estimate potent ial impact of this new act on foreign investors' activities. 
Japan requests Sri Lanka to provide Members with detailed explanations of this new act especially 
about the point on whether the introduction of the new land act removes a land transfer tax of 
100% or not.  
4.144.   In conclusion, I would like to express our strong wish to continue cooperation between the 
Democratic Socialist Republic of Sri Lanka and Japan.  
KENYA  
4.145.   We commend Sri Lanka for the reforms that have been implemented during the review 
period which  enabled the country to achieve an average rate of real GDP growth of 6% between 
2011 and 2015, driven mainly by the tourism, construction, wholesale and retail trade, and 
financial services sectors. We note the reports that economy is dominated by the ser vices sector, 
which accounts for 60% of GDP, followed by manufacturing at 20%, and agriculture at 9% of GDP.  
4.146.   Although the contribution of agriculture to the economy and trade has been declining, it 
remains an important sector for the Sri Lanka in terms of  employment, food security and 
livelihood, particularly for the majority of the population living in the rural areas. In this context, 
there is need for the Sri Lanka to improve productivity in agriculture in order to realize the full 
potential of this imp ortant sector.  
4.147.   We note that Sri Lanka has pursued strategic trade policy initiative aimed at achieving 
greater integration into the global economy through preferential reciprocal trade agreements as 
well as multilateral arrangements. We therefore welcome t he various bilateral and regional 
integration initiatives which have contributed in expanding market access opportunities for the 
Sri Lanka's exports and which we consider complimentary to multilateral approach.  
4.148.   At multilateral level, we appreciated the a ctive role Sri Lanka has continued to play in the 
work of the WTO both in the regular committees and in the Negotiating Groups. Sri Lanka has also 
shown commitments in the implementation of negotiated outcomes as demonstrated by its 
acceptance of the Trade  Facilitation Agreement (TFA) and submission of its category "A" 
commitments. Further, on trade facilitation, we commend Sri Lanka for establishing of the single 
window system which allows all entities involved in importing and exporting to submit required  WT/TPR/W/119  • Sri Lan ka 
 
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  regulatory information to a single electronic gateway and to use electronic funds transfer or online 
payments.  
4.149.   At bilateral level, Kenya and Sri Lanka have continued to enjoy cordial economic and 
diplomatic relations since 1970. In December 2013, the pre sidents of the two countries witnessed 
the signing of an Agreement establishing the Joint Commission for Cooperation which is the 
primary point of contact for advancing, monitoring and evaluating bilateral ties between the two 
countries.  
4.150.   Sri Lanka remains  an important trading partner for Kenya. The two countries share one 
thing in common in that they are key producers and exporters of tea to the world market. Total 
trade between Kenya and Sri Lanka was valued at US$14.3 million in 2015, up from 
US$10.2  million in 2014. Kenya's main exports to Sri Lanka include natural sodium carbonate, 
salt, pepper, and tea which is used for blending purposes. Sri Lanka's main exports to Kenya 
include natural rubber, general industrial machinery, and equipment.  
4.151.   In conclusio n, we wish Sri Lanka a successfully trade policy review process and looks 
forward to continued collaboration and constructive engagement with Sri Lanka, both bilaterally 
and here at the WTO.  
RUSSIAN  FEDERATION  
4.152.   The Russian Federation follows with great inte rest the economic performance of Sri Lanka, 
following the resolution of the internal conflict. The continuous growth of its economy, with an 
average annual rate of 6%, enables us to give an overall positive assessment of the economic 
policies pursued by Co lombo. The reforms implemented by the Government of Sri Lanka since the 
last TPR have greatly contributed to this performance.  
4.153.   Diplomatic relations between the Soviet Union and Sri Lanka were established on 
19 February  1957. But the history of our bilater al relations has started much earlier. The first 
Russians appeared in Ceylon in mid XIX century, and a Russian Consulate was established in Galle 
in 1891.  
4.154.   The solid basis for the mutually beneficial cooperation was laid down in the 60s and 70s of 
XX centur y by the package of bilateral agreements signed by our countries in the spheres of trade, 
economy, science, technology and culture. During the years of our bilateral relations, thousands of 
Lankan students have graduated from universities of the Soviet Uni on and then Russia in 
medicine, engineering and education.  
4.155.   Presently, Russia and Sri Lanka enjoy gradual growth of bilateral trade. Since 2002, Russia 
holds the stable position of leading importer of Sri Lankan tea. In 2015 Russia imported 
41.9 thousand to ns of tea for a total sum of US$193.8 million.  
4.156.   Besides tea, Russia imports from Sri Lanka rubber, leather, spices and garments. And 
Sri Lanka imports from Russia steel, ferrous metal wares, asbestos, fertilizers, electrical equipment 
for metallurgical work s. Several Russian and joint enterprises are registered in Sri Lanka, with the 
total volume of Russian investments exceeding US$7 million.  
4.157.   In February 2016, the first meeting of the Russia -Sri Lanka Intergovernmental Commission 
on Trade, Economic, Scienti fic and Technical Cooperation was held in Moscow. The two parties 
discussed the ways to strengthen bilateral trade and economic relations and signed a Protocol to 
elaborate an Action Plan.  
4.158.   During this TPR, the Russian delegation has not addressed any writt en questions to 
Sri Lanka. Should the need arise we will be ready to discuss bilaterally.  
4.159.   To conclude, we look forward to work with the authorities of Sri Lanka in order to expand 
our trade and investment ties for mutual benefit.  WT/TPR/W/119  • Sri Lanka  
 
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  OMAN  
4.160.   Oman and Sri Lanka enjoy excellent political, economic and trade relations. These relations 
are expected to grow and expand in the years ahead. Both Oman and Sri Lanka are members of 
the Indian Ocean Rim Association (IORA).  
4.161.   Oman is pleased to note that despite the global fin ancial crisis, Sri Lanka has been able to 
attain a reasonable economic growth with an annual growth rate in real GDP of 6% since the last 
Trade Policy Review in 2010. The per capita income has increased from US$2,744 in the year 2010 
to US$3,924 in 2015. I nflation has been maintained at a very low level. All this is testament to the 
fact that the extensive economic reforms that Sri Lanka has embarked upon are beginning to show 
signs of improvements in Sri Lanka's economic performance.  
4.162.   Oman commends Sri Lank a for its strong commitments to the multilateral trading system 
and for adhering to the rules and disciplines of the WTO. It has been abiding by its commitments 
under the multilateral trade agreements and has not been a main party in any dispute under the 
WTO Dispute Settlement Mechanism during the period of review.  WT/TPR/W/119  • Sri Lan ka 
 
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  5  REPLIES BY THE REPRE SENTATIVE OF SRI LAN KA AND ADDITIONAL CO MMENTS  
5.1.  It is with great pleasure that I participate in the second day of the meeting of Sri Lanka's 4th 
Trade Policy Review. On behal f of my country and the delegation, I convey my profound thanks to 
the Ambassadors and representatives of the WTO Member countries who have actively participated 
in our trade policy review meeting. I am delighted to observe the interest of the Members in o ur 
trade and economic policy developments.  
5.2.  At this concluding phase of the Trade Policy Review of Sri Lanka, it is opportune to indicate 
some of the positive conclusions that delegates have graciously pointed out during the discussions 
on Tuesday 1st November 2016.  
5.3.  There is a general consensus on the healthy and robust economic performance of Sri Lanka 
showing an average growth rate of 6% during the period of the Trade policy Review and a GDP per 
capita growth exceeding 25%. Moreover, my country has been c ongratulated for maintaining a 
reduced rate of inflation less than 1% and a relatively low rate of unemployment. These salutary 
developments have taken place amidst external global financial upheavals as well as domestic 
constraints.  
5.4.  Delegates have noted S ri Lanka's ratification of two important instruments of international 
obligation, namely the WTO Trade Facilitation Agreement, the submission of Category A 
commitments and the WIPO Marrakesh VIP Treaty.  
5.5.  At the same time, I would like to take this occasion to address in broad overview the few 
areas of concerns presented by the delegations. The Sri Lanka delegation has already made 
detailed assessment and answers to the approximately 138 questions received from 12 Member 
countries. However, as we conclude our  review on Sri Lanka, it is my pleasant duty to briefly 
enumerate the same.  
5.6.  In regard to trade measures and practices, both the discussant and several delegations have 
mentioned that some bound rates have exceeded the MFN rate for a number of products. 
Sri Lanka has taken steps to adjust the applied duty rates which have exceeded the Sri Lanka's 
bound rates to the WTO in the budget 2017 except few tariff lines on emerging health and social 
considerations.  
5.7.  The concerns of some of the WTO Members on the appli cation of some duties and charges, 
Sri Lanka wishes to inform that Sri Lanka is reviewing the additional taxes, namely Ports and 
Airports Development Levy and CESS Duty and it is expected to phase out those additional levies 
starting from 2017.  
5.8.  Sri Lanka h as also noted the concerns raised by some delegations on the implementation of 
the Customs Valuation Agreement on application of minimum value for Custom Valuation of used 
vehicles. I wish to state that Sri Lanka has done away with the application of Artic le 10 of the 
Customs Ordinance that empowers the application of minimum value for valuation of motor 
vehicles.  
5.9.  In the case of the excise tax on motor vehicles, which is applied on non -discriminatory basis, 
has been structured to promote importation and use  of new generation of motor vehicles with 
alternative energy source and environment friendliness which are suitable for road networks of 
Sri Lanka. For instance, applied tax on all type of electric vehicles is less than 50% of CIF value 
and on import duty on hybrid vehicles is 100% of CIF value.  
5.10.   In respect of concerns expressed by certain delegations on the area of land ownership and 
investment regime, Sri Lanka wishes to inform the Membership of the WTO that a new land policy 
has been introduced and accord ingly the new Land (Restriction on Alienation) Act No. 38 of 2014 
was promulgated. With introduction of this new law, the previous law related to 100% land 
transfer tax law was abolished. Now the Companies with less than 50% foreign shareholding are 
permit ted to purchase land outright and others will be eligible to lease and for a maximum period 
of 99 years. The upfront payment of land lease tax by foreign companies that was originally 
introduced was subsequently removed and the applicable amendments to the  law are being 
presented to the parliament.  WT/TPR/W/119  • Sri Lanka  
 
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  5.11.   With regard to the Incentive Regime of Sri Lanka, currently it does not offer any incentives 
contingent upon export performances and a new incentive regime will be announced at the 
forthcoming budget in 2017, whi ch will be neutral and horizontal in application.  
5.12.   We thank the delegations who have also taken cognizance of the growing fiscal deficit and 
enjoined on us the necessity to take appropriate remedial measures. In this regard, we wish to put 
in perspective th e course of action to be taken by the Government of Sri Lanka. The Government 
has committed to improve its fiscal position in the medium term by increasing the revenue 
collection, reducing the budget deficit and rationalizing the public expenditure. These initiatives will 
be supported by rationalization of Public Debt related to SOEs by converting them into the joint 
venture equity or equity and restructuring SOEs in response to the market driven business 
environment.  
5.13.   I wish to convey our sincere thanks and  gratitude to Madam Irene Young, Chairperson of 
the Trade Policy Review Body, H.E. Dr Stephen Karau, discussant to our Trade Policy Review, for 
his insightful comments on our trade policy. Also to Mr Yonov Frederick Agah, Deputy Director 
General, WTO; Mr. Willy Alfaro, Director, Trade Policies Review Division; Mr  Masahiro Hayafuji  , 
Counsellor, Trade Policies Review section; Ms. Denby Probst, Counsellor, Trade Policies Review 
section; Mr. Usman Ali Khilji, Trade Policy Analyst, Trade Policy Review section, for their dedicated 
efforts in producing comprehensive reports which have been useful for our meeting.  
5.14.   Sri Lanka believes that the 4th review of Sri Lanka's trade policy has provided valuable 
opportunity for Members to enhance their understanding on Sri La nka's economic and trade 
policies. I, therefore, would like to conclude my remarks by expressing my deepest appreciation to 
all Members for the great interest and support expressed during the 4th Review.  
DISCUSSANT  
5.15.   My assessment is that, during our first m eeting on Tuesday, we had excellent discussions on 
the economic performance of Sri Lanka as well as its trade policies and practices since its last 
review in 2010. The contributions from delegations were constructive and encouraging.  
5.16.   I wish to highlight t hat delegations commended Sri Lanka for the reforms it has 
implemented since the resolution of internal conflict which have enabled the country to achieve 
impressive economic growth. The delegations also encouraged Sri Lanka to sustain the reform 
process i ncluding the implementation of programmes under the new "Vision for the Future" in 
order to realize its long term economic and development objectives.  
5.17.   Further, delegations commended Sri Lanka for its active participation in the work here at 
the WTO and fo r progressively and continuously liberalizing its market in order to integrate into 
the multilateral trading system. The delegation of Sri Lanka at the WTO, led by H.E. Ambassador 
Susuri Kumararatne, was commended for raising the profile of Sri Lanka's par ticipation at the 
WTO. Positive developments were also pointed out particularly in the area of customs procedures 
where the single window system has been implemented. It was also noted with appreciation by 
many delegations that significant reforms were und ertaken in the services sector and have 
achieved the desired results.  
5.18.   Some of the challenges facing Sri Lanka such as weak fiscal position; underperforming 
state-owned enterprises; concentration of trade on a few markets and products; and undiversified 
services sector, were also highlighted by many delegations. Concerns were also raised including 
the costly import regime due to application of additional levies and charges; complex tariff 
structure which makes the import regime less transparent and unpredict able.  
5.19.   We appreciate the comprehensive statement by the delegation of Sri Lanka which has 
outlined some of the measures the Government intends to take in addressing some of the 
challenges faced as well as the concerns that were raised by delegations. We we lcome the reforms 
that have been mentioned with regard to land ownership.  
5.20.   At this point, let me conclude by thanking you, Madam Chair, for giving me the opportunity 
to participate as a discussant for the fourth Trade Policy Review of Sri Lanka. I also than k the 
Members for their valuable contribution and the delegation of Sri Lanka led by the Honourable WT/TPR/W/119  • Sri Lan ka 
 
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  Rishad Bathiudeen for its constructive engagement during the review. I thank you for your 
attention.  
EUROPEAN  UNION  
5.21.   The EU would like to thank the delegatio n of Sri Lanka for the replies it has provided to the 
EU's advance questions. The replies and the discussion held last Tuesday and today have been 
very instructive for better understanding Sri Lanka's trade and economic policies. The EU has no 
follow -up qu estions.  
5.22.   As noted last Tuesday by several Members, Sri Lanka needs to make additional efforts to 
improve its business environment and, in particular, to diversify further its economy.  
5.23.   In this regard, the EU will follow closely the works of the Government  and welcomes the 
objectives to adopt export promotion strategy, encourage more foreign direct investment, and 
promote the diversification of exports.  
5.24.   In this respect, the EU would like to underline that improving the business environment 
requires also th e effective implementation of the various policy initiatives and plans that will be 
adopted by the Government in the future.  
5.25.   Finally, we heard the call of Minister on GSP+ status on Tuesday and have taken careful 
note of that. As already indicated, the EU is well aware of the economic importance for Sri Lanka 
of being granted GSP+ status. We are currently conducting a technical assessment of the 
application and will inform Sri Lanka accordingly by the end of this month, with a view of the final 
decision bei ng taken by mid -May 2017, at the very latest, following the necessary internal 
procedures.  
5.26.   In conclusion, we would like to thank again the delegation of Sri Lanka for its constructive 
participation in this exercise.  
UNITED  STATES  
5.27.   Just a few words of apprec iation for the work that the delegation of Sri Lanka has devoted 
to this exercise and our special thanks to the Honourable Minister for clearly having reflected on 
the interventions from Tuesday. The remarks that were provided this morning were very helpfu l to 
put the pieces together. Thank you very much for that.  
5.28.   I was chatting before the meeting with the Ambassador and noted, in anticipation of the 
United States Trade Policy Review which is coming up in a few weeks, that this is a very 
challenging process  for all Members but we consistently find, despite the difficulties and the 
discomfort of occasionally being criticized on certain policies, that there is great value in hearing 
from other Members and understanding clearly that other Members are reflecting  about our own 
trade policies. And we certainly hope that has been the positive experience for the delegation of 
Sri Lanka.  
5.29.   We, the United States, were a bit uncharacteristically late in submitting our written 
questions so we are, for that reason, looking forward to still receiving written responses and will, 
as appropriate, follow -up with your colleagues at the Mission here in Geneva.  
5.30.   I would just like to say that we have very much appreciated some of the verbal responses 
that we had on issues that we hav e raised and, in particular, on the issue of customs valuation 
with respect to imported used automobiles where we received some reassurances and some 
documentation, which is being examined in our capital. We very much appreciate that and again I 
think it r einforces and demonstrates the usefulness of this ability to engage with each other. Thank 
you very much again to all of you for your efforts and congratulations.  
 
Agenda item: Adoption of TPRB's Annual Report for 2016  
5.31.   The TPRB adopted its Annual Report f or 2016 contained in document WT/TPR/W/114/Rev.1.  WT/TPR/W/119  • Sri Lanka  
 
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  6  CONCLUDING REMARKS B Y THE CHAIRPERSON  
6.1.  This Trade Policy Review has provided a very good opportunity for Members to understand 
better recent developments in Sri Lanka's trade policies and the challenges it faces. We owe this to 
the active participation of the Sri Lankan delegation, our discussant, and the 21 delegations which 
took the floor.  
6.2.  At this meeting, Members praised Sri Lanka for having achieved robust real GDP growth 
despite adverse circumstances. N oting the country's high and increasing level of public debt, 
Members urged Sri Lanka to continue with its fiscal consolidation efforts and deepen its structural 
reforms, including the reforms of state -owned enterprises and trade policies. Recognizing the 
importance of the agricultural sector to Sri Lanka's development, Members welcomed Sri Lanka's 
plans to move forward from subsistence farming to agribusiness, with a view to accessing export 
markets by 2020.  
6.3.  Members were informed by the Sri Lankan delegati on that the National Unity Government's 
objective was to provide a common platform to deliver long -term social and economic solutions 
that could solve key problems currently affecting the country. More specifically, the Government 
intended to implement an export -led growth strategy which focused on, inter alia , facilitating the 
country's entry into global value chains, providing a competitive business and investment 
environment, diversifying the country's products and export markets, and promoting the count ry 
as the economic hub in Asia.  
6.4.  Members appreciated Sri Lanka's active involvement in the WTO, especially the role played 
by the delegation as coordinator of the Asian Group of Developing Countries. Many commended 
Sri Lanka on its ratification of the Trade  Facilitation Agreement and the establishment of a customs 
single window for exports and imports. Some Members also encouraged Sri Lanka to accede to the 
Agreement on Government Procurement. While they welcomed Sri Lanka's overall commitment to 
the multila teral trading system, some Members raised concern about customs valuation and the 
use of minimum values. The delay in submitting notifications in the agriculture area was also an 
issue to be addressed.  
6.5.  Members acknowledged Sri Lanka's marked improvement in  doing business and corruption 
indices, and hoped to see further progress. In particular, Members sought the removal of obstacles 
to trade and investment, such as the restrictions on foreign ownership of land and rigid capital 
controls. Many expressed conc ern about the unpredictable tariff regime, which was compounded 
by a myriad of additional taxes and levies including a high excise duty on automobiles and the 
special commodity levy. Members also noted an increase in the number of tariff lines where the 
applied rates exceeded the bound rates.  
6.6.  During this review, Sri Lanka received nearly 140 advance written questions, and has already 
responded to most of them. In a month's time, Members should receive Sri Lanka's replies to all 
the outstanding questions, w hich will then mark the successful conclusion of this TPR.  
6.7.  This TPR has enabled Members to better understand Sri Lanka's trade policies and to 
highlight pertinent issues in specific areas. In his responding statement, the Minister has 
addressed mo st of concerns raised by Members, and has taken note of other comments and 
suggestions. I hope the delegation finds this exchange useful in helping Sri Lanka make further 
progress in its economic and trade reforms, and in due course, successfully accomplis h its "Vision 
for the Future".  
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