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 organisation of training programmes/workshops with foreign resources in Colombo and regional cities on topics related to new developments in international trade and WTO agreements. However, the sector is not without its problems. The outlook for emerging markets has darkened and U.S. interest rate hikes have affected global trade balances. In Sri Lanka, export growth in recent years has lagged behind GDP growth, and industry experts and government officials are working to address it. A new export strategy has been developed, as well as a major explosion of economic diplomacy, to draw more global attention to trade and investment. In 2018, the EDB has launched its five-year national export strategy (NES), which focuses on four pillars: export diversification; Harness geostrategic advantages to become an efficient shopping and logistics centre; Strengthening entry and compliance practices for aussrimic exporters; Establish a transparent, predictable and operational policy and regulatory framework. The country has also made progress in creating international actors for the development of commercial, transport and logistics infrastructure, with an important objective for foreign direct investment (FDI). The increase in capital flows benefited the economy as a whole, with 2018 being the strongest year since direct investment began and investment increased by $2.3 billion. At the same time, SAFTA is undergoing a transformation.
The 2004 agreement brings together Sri Lanka, Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal and Pakistan to remove tariff and non-tariff barriers. However, according to CBSL Governor Indrajit Coomaraswamy, more than a third of intra-regional trade under SAFTA is on the sensitive list, while border restrictions between Pakistan and India hinder merchandise trade and prevent regional integration. As a developing economy without commercial oil and gas resources, increased fuel imports have pushed Sri Lanka`s trade deficit to new heights. While Brent crude oil prices fell to about $51 per barrel at the end of the year, the price of oil peaked at more than $85 in October, leading to a 28.9% increase in fuel imports. In the meantime, exports are mainly intermediate and industrial goods, as well as raw materials such as tea, rubber, minerals and metals.