Russia & Sri Lanka Begin Efforts To End Ceylon Tea Impasse

After a marathon three day bilateral trade session in Colombo that ended on 26 October, both Russia and Sri Lanka achieved a greater understanding on breaking the Ceylon Tea impasse that has been dogging their trade cooperation efforts lately. ‘We warmly welcome the Russian delegation to Colombo” said the Secretary of Ministry of Industry and Commerce D.N. R.Asoka on the morning of 26 October. Secretary Ashoka, leading Sri Lankan side and representing the Minister of industry and Commerce Rishad Bathiudeen,  was addressing the final session of Second Session of Russia - Sri Lanka Inter-Governmental Commission on Trade, Economic, Scientific and Technical Cooperation at Cinnamon Grand Hotel, Colombo. The Russian side was led by the Deputy Minister of Agriculture and Head of the Federal Agency for Fishery of the Russian Federation, (HE) I.V. Shestakov. Also joining the session were Commerce Department Director General Sonali Wijeratne, (HE) Materiy Yuriy Borisovich (Russian Federation’s Ambassador Designate to Sri Lanka) and Ambassador of Sri Lanka to the Russian Federation Dr. Saman Weerasinghe.

The total trade between the two countries in 2016 was at US $ 363 Mn, a decline of 17% over 2015. During the first eight months of 2017 however, trade returned to the growth trend –increasing by 5.6% to US$ 247.2 million in comparison with the US$ 234 million in the same period in 2016. ‘We warmly welcome the Russian delegation to Colombo” said Secretary Ashoka and added: “While highlighting the long-established friendship and cooperation between the two nations, I am confident that this Commission’s functioning would inject a strong impetus in further strengthening the mutually beneficial trade and economic ties between Sri Lanka and the Russian Federation.”

Russian Minister Shestakov thanked the Sri Lankan Co-Chair for the hospitality extended to them. “This is an important event in Russia-Sri Lanka bilateral trade cooperation” he said and stressed: “We are willing to implement the decisions adopted by this Commission in a consistent manner”.

Sri Lankan side continuously pressed for the reduction of import duty by Moscow on its Ceylon Tea exports. Sri Lanka’s complaint was that the duties were based on gross weight of value added teas -that includes packaging material such as ceramic and wooden tea containers-rather than only the weight of net teas. The Russian Side stated that currently, in accordance with the Customs Code of the Customs Union, the basis for calculation of Customs Duties (subject to type of goods and applicable duties) is customs value of goods and/ or its physical characteristics in physical terms (quantity, mass with original packaging which is inseparable from the goods and in which the goods are due for retail, volume of goods or other characteristics). More importantly, the Russian side stressed that “it would take part in this regard within the limits of its competence in working out this issue with all the member states of Eurasian Economic Union.”

At present, Ceylon Tea is the leading Lankan export to Russia, and last year tea claimed 78%  (at US $ 143 Mn) of Sri Lanka’s total exports ($ 182 Mn) to Russia. Other key Lankan exports to Russia last year were apparel, textile fibres, apparel accessories, and activated carbon. Both sides also noted that the value of their bilateral trade had not reached the desired level over the recent years and called for ways to enhance efforts to improve trade through “efficient exploitation of the hitherto untapped potentials”.

Among the Russian agencies represented at 26 October session were Russia’s Ministry of Economic Development, Ministry of Industry and Trade, Russian Fishery Agency, Ministry of Agriculture, and corporates such as SPHAERA Company, Diasoft, PROTEI, Sukhoi Civil Aircraft, and Russian Helicopters. Among Sri Lankan institutions joining the discussions were the EDB, Fisheries Ministry, SL Standards Institution, the Air Force, the Gem and Jewelry Authority, and the Agricultural Ministry.

The first ever Russia - Sri Lanka Inter-Governmental Commission on Trade, Economic, Scientific and Technical Cooperation Session concluded successfully on 12 February 2016 in Moscow.

PHOTO - Front row second from left Russian Federation’s Ambassador Designate to Sri Lanka (HE) Materiy Yuriy Borisovich, visiting Deputy Minister of Agriculture and Head of the Federal Agency for Fishery of the Russian Federation (HE) I.V. Shestakov (third from left), Secretary of Ministry of Industry and Commerce D.N. R.Asoka (fourth from left),  Ambassador of Sri Lanka to the Russian Federation Dr. Saman Weerasinghe (fifth from left) and Commerce Department Director General Sonali Wijeratne (second from right) at the last day of Second Session of Russia - Sri Lanka Inter-Governmental Commission on Trade, Economic, Scientific and Technical Cooperation at Cinnamon Grand Hotel, Colombo on 26 October.

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