FTAs to be signed after policy formulation
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Minister of Trade Dr. Bandula Gunawardena[/caption]
The Sri Lankan Government is formulating a national trade policy, and until the completion of which, the country’s free trade agreements (FTAs) are unlikely to be signed, The Sunday Morning Business learns.
Minister of Trade Dr. Bandula Gunawardena, under whose purview Sri Lanka’s FTAs come, stated that a committee is in the process of preparing a national trade policy, the first of its kind in Sri Lanka, and that it is expected to be completed within the next three months.
“We do not have a national trade policy while many other countries have a policy as such. It is imperative to have trade policy when we are dealing with other countries. We have identified the need and we are in the process of formulating it,” Dr. Gunawardena told The Sunday Morning Business.
He added that proposed FTAs will not be entered into until the committee finalises the national trade policy. However, he added that the ongoing formulation of the policy will not be an impediment to resume discussions with the foreign counterparts of the respective FTAs.
Sri Lanka has a number of pending FTAs, including the China-Sri Lanka FTA, Singapore-Sri Lanka FTA, Sri Lanka-Thai FTA, and the Economic and Technology Co-operation Agreement (ETCA) with India.
As Media Secretary to the Ministry of Trade Mahesh Wickrema told us in September last year, the committee comprises a total of 23 officials and consults all sectors in the formulation of the new national trade policy. The expert committee is headed by retired Supreme Court Judge Justice Saleem Marsoof PC.
The committee also includes Central Bank of Sri Lanka (CBSL) Governor Prof. W.D. Lakshman, People’s Bank Chairman Sujeewa Rajapakse, Dr. Harsha Cabral PC, Prof. Lalithasiri Gunaruwan of the University of Colombo, Government Medical Officers’ Association (GMOA) President Dr. Anuruddha Padeniya, and Laugfs Holdings Ltd. Chairman W.K.H. Wegapitiya.
A national trade policy was approved by the Cabinet of Ministers on 1 August 2017, under the former Government, by the then Ministry of Development Strategies and International Trade. The 2017 policy was to provide guidance on, among other things, FDIs, capacity-building, trade enhancement in and outside of the region, and access to international markets. Nevertheless, it has been reported that the 2017 policy was not formulated in consultation with the industries, thereby failing to achieve its desired results.
Considering the need for another policy, Dr. Gunawardena had made a proposal to the Cabinet to appoint an expert committee representing all relevant parties to formulate a new national trade policy. The proposal was approved on 2 September 2020. The cabinet proposal said that a new policy was required, as the national trade policy that was drafted three years ago was not formulated properly.
In October last year, State Minister of Regional Co-operation Tharaka Balasuriya told The Sunday Morning Business that Sri Lankan authorities are reviewing the provisions of the proposed FTA with China to ensure it would not turn out to be “another Singapore FTA”.
Despite strong opposition from professional associations and other bodies, Sri Lanka entered into an FTA with Singapore in January 2018, following 18 months of negotiations. The opposition was mainly on two grounds. One, that the agreement endangered Sri Lankan jobs by allowing the entrance of Singaporean skilled labour and professionals. Two, that it would open the floodgates for the importation of clinical and nuclear waste, making Sri Lanka a dumping ground for Singapore.
In the face of unrelenting opposition and lobbying, both in the political and professional spheres, former President Maithripala Sirisena appointed an independent committee a few months later, comprising five experts to study the Sri Lanka-Singapore FTA and submit a report.
Meanwhile, in August last year, following the general election, the Government held discussions on the ETCA for the first time in nearly a year, possibly signalling a resumption of bilateral negotiations on the controversial agreement with India. The discussions took place amongst officials of the Ministry of Foreign Affairs, according to Ministry Secretary Admiral Prof. Jayanath Colombage.