Trumpism, Geneva & exports
01 December 2016In a globalized world, operating in the aftermath of the Cold War, three central themes dominate. Those are terrorism, economics and China (the world's second largest economy after the USA), perhaps,not necessarily in that order. Sri Lanka won its war against Tamil terrorism 7½ years ago, after waging war for 26 long years. Therefore, it's free from terrorism at least at this juncture.
But, not so, as far as the rest of the world is concerned, particularly with the rise of Islamist terrorism, threatening to destabilize the world order, with their guns aimed at the volatile Middle East and also at the West led by the USA, because of its belligerent policies towards lslamist terrorism.
Islamist terrorism targeting the West first came to a successful fruition 20 years ago in 1998, after their successful bombings, carried out almost simultaneously, of the US Embassies in Kenya and Tanzania respectively, that year.
The USA is important to Sri Lanka for two reasons. Firstly, it's Sri Lanka's biggest export market and secondly, its attitude towards Sri Lanka politically has global repercussions. Space, constraints making comments on China, therefore, this Editorial is restricted to the USA only and its influence on the island both politically and economically.
In that context, US Ambassador to Sri Lanka Atul Keshap speaking at the inaugural Sri Lanka-USA Business Council (SL-UBC) meeting (formed under the auspices of the Ceylon Chamber of Commerce (CCC)) that took place at a Colombo hotel on Tuesday (29 November) said that Sri Lankan exports to the USA led by apparel and rubber products, grew by 7% year-on-year last year to comprise 27% of the island's total export basket. SL-UBC has a mandate to foster exports to the USA.
He further said that Sri Lanka needs to rise beyond apparel to high paying knowledge economy exports, where such Sri Lankan skills passed out from local universities were being made use of by companies such as Google and Facebook catering to this need, by operating from centres not based in Sri Lanka, but in Hyderabad!
Keshap also said that US-Sri Lanka relations are at an all time high, especially after 8 January 2015. But, there is a catch, despite all of Keshap's postulations and there were several of such made in his speech, such as his references to visits to Sri Lanka by officials from the Millenium Development Corporation and USA's Exim Bank and a visit by a US admiral and so on, since.
The rider however, is the so called US-Sri Lanka co-sponsored resolution adopted in Geneva last year to investigate alleged war crimes committed by the Government of Sri Lanka (GoSL) and of its agents in their war against LTTE terrorism which was successfully prosecuted to a close 7½ years ago in May 2009, after 26 years of bloody conflict against LTTE/Tamil terrorism.
This resolution has both economic and political ramifications to the island. Economic, because the West led by the USA, where one may but fairly say was behind this so called joint resolution, is Sri Lanka's key export market in terms of merchandise and tourism and knowledge services exports.
Possible sanctions as a threat, by Colombo not fulfilling this mandate will be disastrous to the local economy. However, Colombo, conforming to this resolution may agitate the country's 70% Sinhala-Buddhist majority who consider the protagonists behind this successful prosecution of the war, as heroes.
With the seemingly surprising regime change in the USA after President-elect Donald Trump's victory at last month's election, President Maithripala Sirisena wrote to the US administration to rescind these investigations.
When this newspaper asked Keshap what was Washington's response to this plea? An apparently agitated Keshap in response said that he hadn't studied this plea as he had been travelling. Therefore, this island may be waiting with bated breath until such time that he studies this plea and possibly make his recommendations to Washington!
Trumpism promised protectionism to the US voter. So, in that aspect, Sri Lanka's exports to the USA may be in danger, even if the Geneva question is sorted out. In response to this query, Keshap said that Trump will officially assume duties only on 20 January 2017. And, he hasn't named his economic team yet, the Ambassador said, inferring that USA's economic policies will be known, only then.
But, giving a gleam of hope, he said that the USA has always been a trading country. Therefore, will the USA's new economic policies be skewed protectionism, targeting only China? That, however doesn't appear to be so as Trump said that the USA will withdraw from the Trans Pacific Partnership (TPP), a trade pact involving and including several Asian countries, but not China and Sri Lanka.
Japanese Premier Shinzō Abe recently said that without the USA there is no TPP. Japan was also the first country with which the CCC formed its first trade council way back in 1979.
One wonders why, it took 37 years since, for the CCC to form a trade council with the USA, the island's biggest export market? Anyway, better late than never! Perhaps, the CCC/SL-UBC may add weight to Sirisena's plea, by also making a similar plea to Washington?