By John Simmons

American firms exploring commercial opportunities in Sri Lanka face mixed prospects. Economic and trade reform should continue to reduce regulatory and bureaucratic impediments, maintaining Sri Lanka as the most open market in South Asia.

The anticipated U.S. Senate ratification of bilateral tax and investment treaties and an intellectual property rights agreement this year will further enhance the business climate in Sri Lanka. Despite encouraging policy developments and a strong domestic economy, American exports to Sri Lanka declined for the second straight year in 1991. Much of this decline resulted from a drop in wheat sales, which typically comprise over half of all U.S. exports to Sri Lanka.

U.S. exports 1991--$121 million U.S. imports 1991--$605 million

Political and labor opposition has also begun to slow Sri Lankan government efforts to privatize state-owned industries. Best sales products for U.S. companies include telecommunications equipment, computers and electronics, chemicals, and textiles and apparel machinery.

Source: International Trade Administration, Business America Magazine