US embassy cable - 03COLOMBO1146

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