In the meantime, the DoC formulates foreign trade policy and promotes bilateral, regional and multilateral trade relations under four subdivisions: multilateral trade issues, bilateral trade relations, regional cooperation and trade promotion. This gives the division a key role in international trade negotiations with bodies such as the World Trade Organization and the EU. The DoC is also responsible for the ongoing monitoring and evaluation of free trade agreements, preferential trade agreements and comprehensive economic partnership agreements. The Ministry of Development Strategies and International Trade (MODSIT) and the Ministry of Industry and Trade (MIC) are the main public bodies responsible for trade and investment growth. They cooperate to implement support programmes, develop strategies for foreign direct and private sector investment, and work to expand international market opportunities for Sri Lankan products. The Board of Investment (BOI), the Export Development Board (EDB) and the Department of Commerce (DoC) operate as part of MODSIT. If negotiations reduce tariffs, non-tariff measures (NIM) or “behind border barriers” can reduce the implementation of agreements if they are not dealt with effectively. NIMis should be identified at the outset and addressed at the same time as fee reductions/eliminations. In this regard, there should be binding commitments. Many non-domestic exporters have had difficulty entering the Indian market because NMs, such as government taxes, standards and administrative procedures,[v] do not fall within the scope of ILFTA tariff reductions. Sri Lanka is open to trade, accounting for 53% of GDP.
Nevertheless, its share of GDP has steadily declined since the early 2000s, after peaking at 88.6% in 2000. The country mainly exports tea products, clothing, retreaded or used rubber and petroleum tyres. Major imports include oil, gold, clothing and automotive. Sri Lanka`s main trading partners are the European Union (28.6%), the United States (24.9%), India (6.7%), China (3.7%) and the United Arab Emirates (2.6%), mainly from India (21.1%), China (19.7%), the EU (8%) and the United Arab Emirates (7.3%) (WTO, latest data available). The country`s trade policy aims to improve access to the international market for Sri Lankan products. As a result, the government has signed several bilateral and multilateral trade agreements, including at the regional level. China and Sri Lanka are currently negotiating a free trade agreement. However, while China insisted on a free trade pact, Sri Lanka said it wanted more time to negotiate the agreement, as the government is concerned about the economic impact of a hasty agreement on its economy (Sri Lanka had requested a review of the agreement after a decade, to which China did not subscribe). Trade and investment activities in Sri Lanka are benefiting from the country`s situation along the busy Indian Ocean trade routes, numerous agricultural and industrial exports, and young and skilled labour.