• SL yet to set date as it awaits response: Chief Negotiator 

There has been no progress in Sri Lanka’s negotiations on the proposed agreements relating to preferential trade access with its biggest trading partners, China and India, which accounted for about $ 9 billion each in bilateral trade in 2022, despite repeated public declarations of interest by both sides, the International Trade Office (ITO) reveals. 

Speaking to The Sunday Morning Business, ITO Chief Negotiator K.J. Weerasinghe revealed that Sri Lanka was yet to set dates for its next round of trade talks with both China and India and that they were currently awaiting a response from their counterparts on the agreeable dates.

“We have communicated our position. They are yet to get back to us. We are currently waiting for them to communicate the dates for the next round of talks,” he stated.

While the Indo-Sri Lanka Free Trade Agreement (ISFTA) has been in force since 2000, both countries have pursued expanding the FTA into an Economic and Technology Cooperation Agreement (ETCA) since 2015. 

Preliminary discussions on the ETCA were held in 2015 during the Fourth Commerce Secretary-level talks between the Indian and Sri Lankan sides in New Delhi, where the agreement was proposed. 

Following this, 11 rounds of bilateral negotiations were conducted, with the first round held in August 2016 and the last and 11th round in October 2018.

Thereafter, talks stalled following the regime change. 

However, President Ranil Wickremesinghe in the 2023 Budget announced the Government’s intention to resume its trade negotiations with both India and China. 

Thereafter, during President Wickremesighe’s visit to New Delhi in August 2023, both sides jointly unveiled plans to cooperate on power, digital payments, connectivity, and green energy under the ETCA. 

In 2013, China and Sri Lanka commenced a joint feasibility study with regard to the proposed Sri Lanka-China Free Trade Agreement (SLCFTA). At that stage, the two parties studied the feasibility and effect of constructing the SLCFTA comprehensively and deeply. 

The results showed that the construction of the SLCFTA would contribute to further deepening bilateral economic and trade relations in line with the mutual interests of the two countries. It was suggested that the two Governments begin negotiations as soon as possible. 

Thereafter, negotiations commenced in 2014 and five rounds of bilateral negotiations were conducted over the period 2014-’18 before negotiations stalled.

Earlier this year, Weerasinghe revealed to The Sunday Morning Business that in order to resuscitate the stalled negotiations with China in respect of the proposed FTA, the Sri Lankan delegation had handed over a proposal to the Chinese delegation, containing 451 export goods for tariff concessions under the proposed SLCFTA, while China too had prepared a similar number of export goods to be demarcated as eligible for concessions.

Despite the aforementioned developments and public assurances of intent to restart trade negotiations by all sides, steps are yet to be taken on dates for the next round of talks in respect of both trade agreements.

When asked about the delay in agreeing on a date to commence negotiations, a spokesperson from the Indian High Commission told The Sunday Morning Business that 11 rounds of negotiations between India and Sri Lanka on ETCA had been held till 2018 and that the Governments of India and Sri Lanka had decided to start talks on ETCA with a view to open new possibilities of trade and economic cooperation for both the countries.

“This was announced during the visit of the President of Sri Lanka to India in July 2023. Accordingly, the chief negotiators from both sides are expected to interact with each other on a mutually-agreeable date soon,” the spokesperson added.

Attempts to contact the Chinese Embassy proved futile.