Sri Lanka is set to fast track a Free Trade Agreement (FTA) with China; following trade talks between the two countries hit a snag in 2018 under the previous administration.
This was because Beijing disagreed with Colombo’s demand for a review of the deal after 10 years according to officials closely connected with FTA negotiations.
During The previous regime, has tried arriving at a consensus pro-Chinese investment policy, concerns raised as such investments were driving the country of 21 million people deeper into debt and undermining its sovereignty, prompting greater scrutiny of deals with China, he said.
Sri Lanka consumers and businesses import more goods from China than it at the moment, some of which are inputs for exports to third countries.
Ministerial level discussions about an FTA agreement have not been held since March 2017 while lower-level discussions between officials have made little progress after the deadlock over a 10 year review,he disclosed.
However a new Cabinet Sub Committee has proposed fast tracking a Free Trade Agreement (FTA) with China.
The three Cabinet Sub Committees, which were appointed by the President last month to negotiate with China, Japan and the Middle East Region on economic matters met for the first time on 9 and 10 March 2022.
These committees have been brought under the Chairmanship of the Minister of Foreign Affairs Prof. G.L. Peiris, the Foreign Ministry said.
Commencing its task, the Cabinet Sub Committees convened the initial meetings with the participation of Cabinet Ministers Bandula Gunawardena, Namal Rajapaksa, Ali Sabry, Ramesh Pathirana and Johnston Fernando, who function as the Members of the Sub Committees.
The Committees were appointed based on a Cabinet Memorandum presented by the Minister of Finance Basil Rajapaksa, under the theme “Economy 2022 and the Way Forward” to negotiate with countries from which essential food items, raw materials and industrial goods required for the export-oriented industries are imported to the country, with a view to identifying alternative methods of importing such goods.
Prof. Peiris, outlined that the President has appointed the Cabinet Sub Committees to explore an economic way forward in collaboration with reliable trading partners to create a facility that supports trade.
Secretaries and senior officials of the relevant Ministries briefed on various matters such as issues related to trade, employment and foreign remittances.
The Cabinet Sub Committee on China was briefed on the current progress related to the ongoing negotiations in respect of the proposed China – Sri Lanka Free Trade Agreement, while the Committee agreed to fast-track the possible next steps in consultation with the relevant stakeholders at the earliest.
The Sub Committees have directed the relevant officials to obtain a list of urgent requirements from all Ministries and agencies, which Sri Lanka may solicit from partner countries, to achieve economic stability and quick progress.
China has signaled the desire to re-start a stalled Free Trade Agreement talks with Sri Lanka to boost exports and come out of an economic crisis, during a visit of Foreign Minister Wang Yi, Chinese Embassy sources said.
Free trade talks between China and Sri Lanka hit a hurdle in 2018 under the last administration because Beijing disagreed with Colombo’s demand for a review of the deal after 10 years according to officials familiar with the issue.
Officials of the previous government had said that China wanted zero tariffs on 90 percent of goods the two countries sold to each other as soon as an agreement was signed while Sri Lanka wanted it to start with zero tariffs on only half of the products concerned and expand gradually over 20 years.
