-By A Special Correspondent
(Lanka-e-News -23.May.2025, 11.00 PM) Sri Lanka is set to dispatch a senior government delegation to Washington, D.C., for a fresh round of in-person negotiations with U.S. trade authorities, marking a pivotal moment in the island nation’s bid to recalibrate its trade policy and seek tariff relief as it battles persistent economic headwinds.
The meetings, scheduled following an invitation by the Office of the United States Trade Representative (USTR), come as part of a broader diplomatic and economic outreach by the administration of President Anura Kumara Dissanayake, who is attempting to reposition Sri Lanka as a credible and rules-based player in international trade.
This will be the second in-person engagement between the two sides, and follows a series of virtual consultations held over the past year. The bilateral dialogue, according to Sri Lankan officials, will centre on tariff structures, market access, and the potential reclassification of select export categories—issues that carry significant weight given the country’s precarious balance of payments position and its ambition to double export earnings over the next three years.
“This is a critical juncture in Sri Lanka’s trade diplomacy,” a senior official at the Ministry of Trade told LankaEnews. “The U.S. remains one of our most important trading partners, and these discussions offer us an opportunity to secure not just relief, but relevance.”
Ahead of the delegation’s departure, President Dissanayake chaired a high-level preparatory session in Colombo, underscoring the strategic importance of the talks. According to the President’s Media Division (PMD), the focus was on aligning the delegation’s negotiating posture with the government’s broader economic recovery agenda—a programme that hinges heavily on foreign trade, investment inflows, and institutional reforms.
Participants in the pre-briefing included an array of key technocrats and policymakers: Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma; Central Bank Governor Dr. Nandalal Weerasinghe; Secretary to the Ministry of Finance K.M.M. Siriwardana; Senior Economic Advisor to the President, Duminda Hulangamuwa; and K.A. Vimalenthirarajah, Secretary to the Ministry of Trade, Commerce, Food Security and Cooperative Development.
Legal and diplomatic support is to be rendered by representatives from the Attorney General’s Department and the Ministry of Foreign Affairs, including Nirmal Vigneshwaran and Dharshana Perera respectively.
According to internal briefing notes seen by The LankaEnews, the delegation has been tasked with exploring preferential market access mechanisms, tariff suspension frameworks for strategic exports, and the potential to revive aspects of the Generalised System of Preferences (GSP), from which Sri Lanka previously benefited.
At stake for Sri Lanka is more than just improved margins for its garments and tea. As one of South Asia’s most open economies, the country is exceptionally sensitive to trade policy shifts. The U.S. is Sri Lanka’s single largest export destination, accounting for over 25% of its total outbound trade. Apparel products—subject to relatively high tariffs by global standards—form the backbone of this trade relationship.
With global commodity prices remaining volatile and borrowing costs elevated, Colombo is looking for creative mechanisms to stabilise its foreign exchange inflows without resorting to fresh debt. A successful outcome in Washington could bolster investor confidence, ease pressure on the rupee, and widen the country’s fiscal space ahead of what is expected to be a politically sensitive budget in the fourth quarter.
However, securing tariff concessions from Washington is never a straightforward affair.
“The Biden administration has increasingly aligned trade policy with broader geostrategic and labour considerations,” said Dr. Daniel Mercer, a trade economist at the Peterson Institute for International Economics. “Any discussion on tariffs will almost certainly touch on human rights, supply chain transparency, and regulatory reform.”
Indeed, Sri Lanka’s trade track record in recent years has drawn criticism from labour advocacy groups and rights organisations, particularly during the Rajapaksa era. President Dissanayake’s administration, which has promised to restore rule of law and public accountability, is likely to highlight recent reforms in labour laws, environmental standards, and anti-corruption enforcement as part of its Washington pitch.
The timing of the talks is also geopolitically significant. With India and China jostling for influence in the Indian Ocean, Sri Lanka’s pivot towards Washington is being carefully observed by regional capitals.
While Colombo insists that it maintains a non-aligned foreign policy, there is a growing sense within Western diplomatic circles that Sri Lanka is willing to deepen commercial and strategic ties with the U.S. as a hedge against debt dependency on China and overexposure to volatile regional supply chains.
“Economic diversification is the new name of the game,” said Duminda Hulangamuwa, the President’s economic advisor. “We are not walking away from anyone—but we are making sure that no one country holds disproportionate leverage over our development trajectory.”
This recalibration is evident in Colombo’s increasingly proactive stance on bilateral trade frameworks. Over the past year, Sri Lanka has re-engaged with the European Union on GSP+ reforms, renewed trade talks with Japan, and opened early-stage consultations with the UK on a post-Brexit trade partnership.
Domestically, the stakes are high for President Dissanayake. With inflation decelerating but unemployment still stubbornly high, the government needs quick wins to sustain public trust in its economic turnaround narrative. Trade, particularly with developed markets, offers the kind of low-cost, high-impact solution that can drive jobs, attract capital, and signal competence.
Yet, the success of such initiatives depends as much on delivery as on diplomacy.
“There is a real risk that these talks turn into another photo-op unless backed by domestic policy consistency,” warned Dr. Saman Kelegama, a former trade negotiator. “The Americans are experienced negotiators. They expect implementation capacity, not just goodwill.”
According to sources close to the negotiating team, the delegation has been instructed to present a unified front, avoid “shopping lists,” and prioritise a few high-impact deliverables—such as duty suspensions on selected textile categories and expedited approvals for dual-use technology imports critical to the digital economy.
Though the finer details of the Washington talks are being kept under wraps, officials confirm that outcomes will be made public once meetings conclude. Observers expect a joint communiqué and a follow-up schedule that could include sector-specific working groups on apparel, digital trade, and environmental goods.
The political calendar adds a layer of urgency. With elections expected in 2026, the Dissanayake administration has little time to turn diplomatic gains into tangible economic dividends.
Still, even partial success in Washington could prove catalytic. A symbolic tariff relaxation or a pilot preferential agreement would not only boost exports but also help anchor the rupee, attract portfolio inflows, and add credibility to Sri Lanka’s post-IMF economic narrative.
As the Sri Lankan delegation packs its bags for Washington, the stakes are unmistakably high. The mission is as much about economics as it is about optics: to signal to the world that Sri Lanka is back—not just as a tourist haven, but as a serious trading nation with competent leadership, policy coherence, and a pragmatic understanding of the global order.
Whether Washington buys into that story remains to be seen. But for now, Sri Lanka’s trade diplomacy has left the virtual chat rooms and stepped back into the room where it happens.
-By A Special Correspondent
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by (2025-05-23 21:14:20)
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