Learn From FTA Before Jumping To CEPA

By Sarath Wijesinghe –September 25, 2015 

Sarath Wijesinghe

We are in the learning process through experience. This is our Nation and should take careful and calculated decisions in the interest of our other citizens who are in need of our guidance and it is our duty to impart our hard earned knowledge and experience freely for their benefit and the nation building. Rulers are only temporary caretakers, of the nation and we have a duty to direct them in the correct direction. These matters should be viewed and considered as matters of national interest without narrow political and ideological considerations. FTA and CEPA are the main issues today which are in a confused and uncertain situation. We have not done well in FTA and it is not advisable to get into further trouble by expanding this troubled commercial agreement with the giant South Asian leader and the regional political and economic Giant.

FTA – free trade agreement with India 

Free trade agreement with India was signed in 1998 and entered into force in 2000 with hopes of benefiting Sri Lanka and providing fair competition and expand our trade with India. In 2013 total export to India was 543.3 million and the import from India has been 3026 billion. (Source – Department of Commerce Sri Lanka) 21% of our imports are from India and all outside FTA with no concessions. 27% total arrivals are from India and for the time being most are genuine travellers. Free movement will have an influx of Indians coming through the proposed bridge and the tunnel if implemented as reported in Indian media. Majority of the rest of the visitors are from China USSR West including EU. Should there be a free movement from India with 50% without toilet facilities and the economy far below Sri Lanka will have to face enormous issues that the UK is experiencing due to integration with EU. The items to be benefited by FTA and CEPA are Tea, Garments, Vanaspati, Textile, and Oil, Service Sectors and many other items and factors. India is one of our main competitors on tea and the tea production in India is hardly sufficient for the local consumption. They need quality tea to upgrade and re-export to the world. Our tea exported to India will be mostly benefited India due to the enormity of the country and powerful business connections worldwide to value add our items and export to the world, when we are competing with Kenya to be the world leader on Tea. We are experienced leaders of tea though small compared to India. On garments and textiles it is our pride to see Sri Lankan Labels in garments in the world markets worldwide including Marks and Spencer in the United Kingdom. Our pepper and Cinnamon is world class in the world market and the offer by the EU on re introduction of GSP will take our garments to the world market with a new vigour. Ceylon Chambers of Commerce too have commented on Mirror 28/4/15 that integration is good but free trade agreements should be carefully handled especially when dealing with asymmetrical powers. We had unpleasant and bitter experiences with India before. There is no guarantee they are changes and it is their duty to do the best for their country over others.                    Read More