Sri Lanka’s success in recent trade agreements lay in the Asia Pacific and India-Sri Lanka accords, a key official of the Commerce Department said yesterday.
By Sunimalee Dias
These two agreements were noted to be “relatively successful” in that the India-Sri Lanka Free Trade Agreement (ISFTA) had a vast range of products with many being marketed locally as well as in India, Director General of Commerce Gomi Senadheera said. He was speaking at the seminar organised by the Spices and Allied Products Producers’ and Traders Association (SAPPTA) on the topic of Free Trade Agreements: Current Engagements/Negotiations”.
He pointed out that his department was receiving numerous complaints relating to these two agreements, and observed, “No successful trade agreement will be without problems.”
Commenting on the ISFTA, he said, this Agreement came about with the two countries intending to enter into a bilateral trade agreement that resulted in more imports from India than exports.
In this respect, Senadheera noted that it was crucial to find out the products exported under the agreement in a bid to understand the manner in which it works.
It was observed that the preferential products exported under the agreement by India were much less than its imports.
Under the Balance of Trade (BOT) the preferential trade since the agreement was signed has remained favourable although generally it appeared to be unfavourable to Sri Lanka.
Commenting on the Asia Pacific Trade Agreement (APTA) formerly known as the Bangkok Agreement signed in 1975, he said that although the agreement originally covered a large number of countries it was later found that only Bangladesh, China, Korea, India, Laos and Sri Lanka were the real participants.
Significantly this was the only trade agreement beneficial to Sri Lanka that established trade ties with both China and India with notable participation by these two countries that the agreement APTA is considered as Sri Lanka’s window to the Chinese and Korean market.
Senadheera noted that the APTA is currently one of Sri Lanka’s more important agreements with the highest number of exports amounting to 427 products, and the highest aggregate.
This agreement provides space to widen the preferences to cover at least 40% of the number of tariff lines of each member; deeper tariff cuts for Sri Lanka in some of its major exports as opposed to the South Asian Free Trade Agreement (SAFTA) is a slow moving agreement within which Sri Lanka’s exports are much less.
Inspite of the bilateral agreement, the country continues to import substantial amounts through an agreement that is largely a politically ambitious venture, Senadheera said.
Other agreements that Sri Lanka is party to, is the Global System of Trade Agreement (GSTA) which is a preferential trade agreement mainly for the developing countries from which the local spice exporters have mainly benefited. Senadheera observed that this was
largely a political agreement with very few concessions being exchanged.
Commenting on the Common Economic Partnership Agreement (CEPA) which has now gone through three rounds of negotiations, it was noted that currently they will review the negative list and have already addressed the relaxation on rules of origin.
In addition, customs procedures and trade facilitation have been taken up while the matters pertaining to product standards and consumer protection were also being negotiated.
An agreement similar to that of ISFTA is the Pakistan-Sri Lanka Free Trade Agreement that was signed in August 2002 and implemented three years later.
“Currently negotiations are ongoing on this particular agreement between the two countries,” Senadheera said.