Tapping the EU markets

The first thing that comes to mind when exports are mentioned is 'markets'. The key to enhancing our exports is finding good markets. For some products, we have been sticking to a few traditional overseas buyers, instead of expanding to new (non-traditional) markets. This naturally stymies our export potential.

Sri Lanka has always had a good trade relationship with the European Union, its largest trading partner. But the recent expansion of the EU to 25 member States has not registered in the minds of many exporters. The emerging markets in the EU must be tapped in order to expand Lanka's exports.

Exporters were told at a seminar recently EU countries have now become lucrative markets mainly due to changes in consumer affluence. As the former Eastern European countries embrace full-blown market economies, their consumers are going in for exotic imported products, be it food or jewellery, using their disposable income.

Unlike some other countries and regions, the EU does give a special place to exports from emerging economies. That should work in our favour. Lankan companies must also seriously consider investing in the EU region, the largest borderless trading bloc in the world. Establishing a base in one country is enough, as products and services can be traded across the entire bloc free of cumbersome regulations.

Participating in trade fairs held in the new members of the EU and exchanging business visits will also go a long way in improving our export potential.

The Ceylon Chamber of Commerce (CCC) and other trade chambers are playing an active role in this regard. The CCC's Trade Fair Unit has excelled by exploring potential emerging markets. The special focus of this unit is the expansion of trade, investment, joint ventures and services between Sri Lanka and overseas markets. During May - October 2005, the unit organised trade and investment promotions missions to Libya, Tunisia, Czech Republic, Romania, Austria, Slovenia and Slovak Republic, most of which are new markets in Africa and Europe.

New markets alone will not cure our export ills. New products should also come into the picture. These products shine because they are innovative, appealing and even rare. Add a dose of environmentalism to the product and there is a good chance of success in markets worldwide.

We feature one-such groundbreaking product in our pages today. Elephant dung paper has carved a niche among discerning buyers everywhere. Maximus (Private) Limited, which manufacturers the paper in Sri Lanka, already operates two plants to meet the demand, with a third on its way. This handmade eco-friendly paper has certainly won the hearts of international buyers, most of whom are in Japan, USA and Canada.

That said, one cannot forget the importance of traditional products such as garments and tea. Garments have become a mainstay and Sri Lanka is poised to earn a projected US$ 3,000 m from apparel exports in 2006. This is an example for an export industry that has successfully faced many challenges, including the phasing out of the multi-fibre agreement and tough competition from regional exporters.

The private sector and business chambers alone cannot promote exports. Governmental support is essential. Several Government agencies are working with the private sector to raise exports. Financial incentives and concessions are also important and we hope that today's budget also has such measures in store for exporters.