- Says legal reforms including a modern IPR regime key to attract US investments
- Nomura analysis says Vitenam benefited most from US-China trade war
- U.S firms already have over US $300mn worth investments in Sri Lanka
By Nishel Fernando
Sri Lanka has a high potential to attract U.S. firms, which are trimming down their investments in China, and looking for alterative locations amid growing trade tensions between the world’s number one and number two economies.
“US firms and others are increasingly looking to reduce their investments in China and invest elsewhere. There seemed to be more potential for Sri Lanka to attract these investors, in particular, for light manufacturing,” U.S. Ambassador to Sri Lanka and the Maldives, Alaina B. Teplitz said.
She made these remarks addressing the 27th Annual General Meeting of the American Chamber of Commerce (AmCham) in Colombo last Thursday.
Ending one month truce, the U.S. President Donald Trump recently announced that the U.S. would slap a 10 percent tariff on an additional US $300 billion worth of Chinese imports from September 1 citing slow progress of trade negotiations between the two countries.
According to an analysis by the Japanese investment bank Nomura, Vitenam benefited most from the US-China trade war followed by Taiwan, South Korea, Chile, Malaysia and Argentina as several supply chains moved out of China.
In order to attract these investments, Teplitz emphasised on the importance of legal reforms, particularly with regard to an Intellectual Property Rights
“Based on feedbacks from AmCham and other business leaders, we continued to advocate in crucial legal reforms in modernisation as well as consistency and predictable regulatory environment.
“Strong IP rights for example, have increasingly become important for any country that intends to compete for U.S. businesses and wishing to capitalise on digital economy,” she noted.
According to media reports, tech manufacturers are in particular shifting their U.S.-bound production plants out of China over the increasing uncertainty and hike in import duties.
Teplitz stressed that in the absence of a modern IPR regime, Sri Lanka will not be able to incentivise innovation in the country to support the growth in the country’s technology sector. “The technology sector in Sri Lanka is going to depend on modern IPR regime. Without it, there is no incentive to innovate as there won’t be a reward for innovation,” she pointed out.
She also urged the private sector to continue to engage in advocating the government to achieve these objectives, which are crucial for their growth. Sharing the United States’ approach to improving bilateral ties with partners, Teplitz reiterated that U.S currently focuses on expanding economic opportunities around the world through economic diplomacy to create open, fair, reciprocal and transparent economics.
“The world is a safer and more secure place when strong and sovereign capable nations partner together. Therefore, we are looking for long and truthful partnership with Sri Lanka, looking on the past 70 years of bilateral ties and looking towards the future with an open, fair, reciprocal and transparent economy that raises standards , attracts investments and provides opportunity for all,” she elaborated.
According to her, U.S firms have over US $300 million worth investments in Sri Lanka, creating hundreds of high-end and high-quality jobs in industries ranging from manufacturing to information technology.