The Curse of Depending on USA for Exports: Sri Lanka Suffers from TPP
Posted on October 7th, 2015
Dilrook Kannangara
Twelve countries finally signed the Trans Pacific Partnership (TPP) agreement headed by USA. Japan, Vietnam, Malaysia, Singapore, Mexico, Canada and Australia are other noteworthy members. They will be almost totally reducing tariffs on key traded items.
The biggest winners of TPP are Vietnam and Malaysia. The biggest losers are Bangladesh, Sri Lanka, Pakistan, Cambodia and China. Sri Lanka’s share of US apparel imports is expected to fall by 0.2% from 1% to 0.8%. Although they look small in terms of US trade, it is a drop of 20% (1% to 0.8%). With more than 22% Sri Lanka’s exports going to USA which is the island nation’s largest export destination, a 20% drop will be devastating. It will be about $350 million or 0.5% of the GDP.
It will not be like NAFTA which ruined many garment factories in the mid 1990s but eventually stabilised as Sri Lanka had a still lower cost of production. Surviving TPP will be nearly impossible unless Sri Lanka too joins the TPP.
http://www.cnbc.com/2015/07/28/winners-and-losers-in-the-worlds-biggest-trade-deal.html
This will worsen Sri Lanka’s already precarious debt situation and balance of payment crisis.
October 7th, 2015 at 6:31 pm
No one knows the details of the TPP. In the US Congress the papers were supposed to have been kept in a secret room which they could go and read but no one could take cell phones or any recording devices into the room. No one could also make any written notes. It is also supposed to allow companies to by pass the laws of each country if there are any disputes. Furthermore, companies such as Monsanto will be able to force and sell GMO seeds and chemicals with no restrictions in member countries. In USA, Vermont managed to pass a Bill to label GMO foods with great difficulty. However, now the Congress has passed a Bill to ban states from labelling GMO foods. If the Senate also approves this bill the States will have no say. I am not sure but I believe that TPP will have similar powers. Imagine what will happen in India, Sri Lanka etc. We will not have the power to ban Glyphosate which means even if most of our people die of CKDU we will have to grin and bear it. Europe has banned Glyphosate and some of the South American Latin countries have done the same. I am surprised China signed it. They must be desperate for the business. There is a lot of opposition for it in Canada, and by some Senators. Hilary Clinton has stated she is opposed to it since it will cause USA to lose jobs.