Sri Lanka to commence feasibility study on a free trade agreement with Malaysia
The government of Sri Lanka is scheduled to commence a feasibility study in early November to explore the possibility of entering a free trade agreement (FTA) with Malaysia in line with a request from the Malaysian government.
If the findings of this study prove to be positive and negotiations produce a mutually beneficial agreement, the two nations could sign an FTA before the end of 2020, according to the Ministry of Development Strategies and International Trade (MoDSIT) and the Department of Commerce (DoC), the local media has reported.
An official from the Ministry has told The Sunday Morning Business that the Ministry floated the tender to finalise an independent research body from 3-24 June and is currently in the process of evaluating the bids and finalising which research body would conduct the feasibility study.
The study will be carried out for a period of six to seven months in five phases, and stakeholder comments will be obtained parallel to this process.
The study will focus on providing an analysis on the extent to which the proposed agreement is in line with national policies and interests.
In addition to this, the media report states that attention will also be paid towards the identification of service sectors which can be liberalised under the proposed agreement, recognition of a modality for investment, and a macro-level analysis of the impact of the proposed agreement.
During the first phase, an inception report has to be prepared within 14 days after contract signing. Subsequently, the first draft report, second draft report, final draft report, and final report have to be compiled within 120 days, 150 days, 180 days, and 210 days after contract signing, respectively.
Following the compilation of the final report, it will be submitted to the Cabinet of Ministers for their information and the Ministry will thereafter decide on whether to sign the agreement.
Malaysia has expressed its initial interest to go for an FTA with Sri Lanka.
OSL take:
Sri Lanka’s geographical positioning in the Indian Ocean region, the many trade agreements as well as trade concessions enjoyed by the country have made the island the ideal business destination in the South Asian region. The addition of an FTA with Malaysia will be an added incentive that would boost Sri Lanka’s exports sector as well as foreign investments. Foreign businesses/investors could therefore explore business opportunities in Sri Lanka while also looking at setting up base in Sri Lanka to do business with other South Asian countries.
| Article Code : | VBS/AT/09102019/Z_4 |