Appendix B

 Best Prospects for U.S. Exports

 Agricultural Commodities and Food Products:

 Sri Lanka has been an excellent, consistent market for U.S wheat
 in recent years, reaching 106 million dollars in 1993.  With a
 combination of sizable PL-480 and EEP programs, the U.S.
 supplied 100 percent of Sri Lanka's wheat in 1993.  Maintaining
 U.S. market share, however, may be difficult as Sri Lanka shifts
 from a 100 percent government controlled (single-importer)
 system, to one with some competitive private sector importers.
 The fresh fruit and frozen food markets in Sri Lanka have
 developed in recent years to around a million dollars, opening
 avenues for U.S. suppliers.  Australia is the major competitor
 for food products.

 Aircraft and Aircraft parts:

 This sector continues to be one of the largest for U.S. exports
 to Sri Lanka, 10 million dollars in 1993.  Air Lanka, Sri
 Lanka's national carrier, has several U.S. aircraft (Lockheed
 Tri-Stars) which require spare parts.  The military has several
 Bell Helicopters.  In addition, recently acquired Airbuses
 include some American equipment.

 Telecommunications:

 The Government of Sri Lanka (GSL) is in the process of greatly
 expanding its telecommunications network.  In the last two years
 U.S. companies have sold major earth satellite stations and
 international switches to Sri Lanka Telecom.  Recently two U.S.
 companies were awarded contracts worth more than 50 million
 dollars to provide about 60,000 additional phone lines, radio
 links and switching equipment.  As the network expands, business
 and consumer interest in related telecommunications equipment,
 including more sophisticated information and data transfer
 technology, is increasing.  U.S. companies have already begun to
 develop this market.

 Energy Production and Conservation Technology:

 Electricity demand is growing 7.5 per cent per year in Sri Lanka
 and production is hard-pressed to satisfy demand.  The GSL hopes
 to add an additional 800MW of generating capacity in the next 8
 years at an estimated cost of $1.4 billion.  Substantial
 opportunities exist for combined cycle, conventional oil, and
 coal - fired plants.  These projects offer the possibility of
 increasing exports by hundreds of million dollars in the next
 few years.  Given excess demand and rising energy prices,
 conservation in the short term can help mitigate energy
 shortages.  Accordingly, U.S. conservation technology would be
 valuable for Sri Lanka, as might hydro, wind, solar and mr
 conversion technologies.

 Textiles and Related Equipment:

 Apparel manufacturing is Sri Lanka's most important industry.
 In 1993 this market generated more than $1.3 billion in Sri
 Lankan export sales, of which the U.S. imported more than half.
 Sri Lanka currently imports 850 million dollars worth of fabric
 annually, of which only 9 million dollars worth is from the U.S.
 Demand for high-quality fabric used for export apparel will
 remain high and the U.S. can work to cultivate this market.  In
 order to become more productive, Sri Lankan garment
 manufacturers are increasingly using computer assisted pattern
 design, cutting and sewing technology, in which the U.S. has a
 competitive advantage.

 Sri Lanka is currently expanding domestic textile production,
 thereby creating opportunities for U.S. equipment.  It imported
 1 million dollars worth of textile equipment in 1993.

 Expansion of the Sri Lankan textile industry is resulting in an
 increased demand for cotton.  While U.S. sales of cotton
 increased to more than a million dollars in 1993 this remains
 only 5 percent of Sri Lanka's total cotton imports.

 Computerization and Information Processing:

 Information processing in Sri Lanka has become increasingly
 widespread and sophisticated.  As a result in recent years
 computer hardware and software sales have increased at more than
 100 percent annually.  Increased sales to the private as well as
 the public sectors has made this the largest growth market, with
 U.S. exports currently running around 3 million dollars a year.

 Financial and Management Services:

 As the Sri Lankan economy grows, financial markets will continue
 to expand rapidly.  Sri Lankan expertise is developing in these
 markets and there are joint venture opportunities for U.S. firms
 engaged in underwriting, brokerage, and discounting, as well as
 the provision of other financial services such as retirement and
 personal financial planning.

 Pollution Prevention and Control Technology:

 Urbanization and industrialization already threaten Sri Lanka's
 environment.  The U.S. is distinguished in pollution prevention
 and control and should capitalize on these markets, focusing on
 solid waste removal, recycling, treatment and disposal
 technology.

 Light Industrial Goods and Equipment:

 Export-oriented development will lead Sri Lanka into increased
 light manufacturing of products such as household tools, small
 appliances, cutlery, kitchen products, and furniture.
 Consequently, opportunities for U.S. producers of industrial
 inputs and machinery, including lathes, grinders, drills, etc,
 should expand in the near-term.