Sri Lanka-Indonesia second round of Preferential Trade Agreement talks in Colombo
The Morning: The second round of negotiations between Sri Lanka and Indonesia on the proposed Preferential Trade Agreement (PTA) is scheduled to be held in Colombo from 19-20 June, according to the International Trade Office.
Speaking to The Sunday Morning Business, International Trade Office Chief Negotiator K.J. Weerasinghe revealed that after concluding the first round of negotiations between Sri Lanka and Indonesia on the proposed PTA in April, both sides had come to an agreement to hold the second round in Colombo in June.
He stated that the plan was to enter into the PTA with Indonesia by March 2025 and that both parties had already tentatively agreed to hold the third round of negotiations in early July for this purpose.
“We hope to enter into the PTA before March 2025. We have an agreed time schedule but we hope to do it before that, if possible, by the end of the year. This round will be on 19 and 20 June. For the next round also, we have tentatively agreed for dates in early July and for the fourth round by the beginning of August. If we finish in the beginning of August, we will have to go through the other processes such as the exchange of Cabinet approvals, etc.” he stated.
He revealed that current trade talks were for the purpose of entering into a PTA and that both Sri Lanka and Indonesia had agreed that the proposed PTA would be the first step towards entering into a Free Trade Agreement (FTA) at a later period.
Weerasinghe further revealed that the 14th round of negotiations between Sri Lanka and India on the Economic and Technology Cooperation Agreement (ETCA), which was previously scheduled for June, would have to be postponed to July due to the ongoing Indian elections.
“The Indian elections are the reason we are waiting. After the elections, we will agree on the dates. We would have held it in June, but we can’t do so now, because they need clearance from the new government. Therefore, negotiations will likely take place in July,” he stated.
Indonesia-Sri Lanka trade was valued at $ 369.7 million throughout 2023. About $ 326.6 million of the trade figures were Indonesian exports to Sri Lanka. In January 2024 alone, the bilateral trade amounted to $ 23.5 million.
OSL take:
Sri Lanka is currently engaged in reviewing and further strengthening the country’s trade ties with the countries that Sri Lanka already has functioning trade ties while also exploring new trade agreements with more countries. Sri Lanka this year signed a free trade agreement (FTA) with Thailand and is in the process of finalizing several more FTAs and PTAs this year. It is in such a backdrop that Sri Lanka is expediting talks with Indonesia to finalize the proposed PTA. Given Sri Lanka’s strategic positioning in the Indian Ocean and the strong trade ties enjoyed with other countries, Sri Lanka provides the best destination as a trading hub in the South Asian region. While boosting Sri Lanka’s manufacturing and export sectors through the many trade ties, they also provide foreign businesses/investors to set up base in Sri Lanka to engage with other countries using the preferential treatment enjoyed by Sri Lanka through the trade pacts.