Sri Lanka to negotiate amendments and move forward on free trade agreement with Singapore
Sri Lanka has reportedly identified 18 amendments to be made the controversial Sri Lanka-Singapore Free Trade Agreement (SLSFTA) and is anticipating conducting negotiations with Singapore.
Department of Commerce Acting Director General Ananda Dharmapriyah has told The Morning that the 21-member National Negotiation Committee has reviewed and identified 18 amendments to be made to the Sri Lanka-Singapore FTA.
“Sri Lanka anticipates conducting negotiations with Singapore regarding the amendments identified in 18 categories, which has been delayed due to the current Covid situation,” he has stated.
According to the report, a 21-member National Negotiation Committee was appointed last month to overlook the pending FTAs of Sri Lanka. Of these 21 members, 17 members represent the authorities of Sri Lankan institutions, while four members represent the Trade Ministry.
Sri Lanka had entered into the Sri Lanka-Singapore FTA in January 2018, after 18 months of negotiations amidst local opposition and one opposition was mainly on two grounds. One was that the agreement endangered Sri Lankan jobs by allowing the entrance of Singaporean skilled labour and professionals. The second was that it would open the floodgates to the importation of clinical and nuclear waste, making Sri Lanka a dumping ground for Singapore, according to local media reports.
In May 2019, Sri Lanka proposed setting up a joint committee with Singapore to amend the FTA, and at that point, the Ministry of Foreign Affairs had told The Morning that its provisions were still being reviewed.
Bilateral trade in goods between Singapore and Sri Lanka has been valued at US$ 1.1 billion in 2017. Sri Lankan imports from Singapore were valued at US$ 1 billion in 2016, accounting for 5% of all Sri Lankan imports. However, 58% of imports were mineral fuels and petroleum-related commodities, which energy-dependent Sri Lanka would have to import nonetheless. Singapore is Sri Lanka’s fourth-largest source of imports.
Singapore is Sri Lanka’s 20th largest export destination and Sri Lankan exports to Singapore have been valued at US$ 115 million in 2016, or 1% of all Sri Lankan exports. Sri Lanka’s main exports to Singapore are mineral fuel and oils, textiles, precious and semi-precious stones, and ships and boats.
SLSFTA liberalises several industries to facilitate trade in services and provides commitment, transparency, and certainty for Singaporean service suppliers operating in Sri Lanka.
The SLSFTA also covers consultancy and advisory services in sectors such as legal advisory for international and third-country law, but not for Sri Lankan law, advisory of architectural and engineering services, or management consultancy.
Singapore is Sri Lanka’s fourth-largest investor followed by China, Hong Kong, and India. Singapore contributes foreign investment to Sri Lanka to an extent of 5.3% of GDP over 2014-17.
OSL take:
Sri Lanka is currently in the process of re-evaluating and strengthening the country’s bilateral and trade ties. Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery. The country’s manufacturing and exports sectors continued operations through the Covid 19 lockdown last year as well as the present travel restrictions. The expansion shown by Sri Lanka’s key economic sectors in the country is indicative of the business/investment opportunities growing in the country. Given Sri Lanka’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country, the island is fast becoming a business hub in the South Asian region. Sri Lanka’s functional free trade agreements with several key foreign countries has made it the ideal business destination to set up base to engage with other foreign countries.
| Article Code : | VBS/AT/20210531/Z_3 |