Export Competitiveness: Moving from USA towards Asia

Abstract

Over 50 percent of Sri Lanka’s exports go to the USA and the West. While Sri Lanka’s total exports remain tilted towards the USA and the West, growth is tilting to the East, and more towards Asia. The consequence of the tilt is that China’s and India’s share in the country composition of exports has become significantly more prominent over the last decade and a half – while their total share remains small in comparison to Europe and the USA. The data in this Insight gives some hope that Sri Lanka could evolve more competitive export products and balance its export dependence by moving from USA towards Asia. So far the move towards Asia has been greatly assisted by trade agreements providing preferential trade – especially with India and China. Preferential trade can provide an initial boost but sustaining it will depend on internal country policies and structures being focused towards improving competitiveness.