Private sector wants key stakeholders to be part of free trade deals

Published : 9:39 am  September 4, 2015 | No comments so far |  | 


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dsa1By Shabiya Ali Ahlam
Private sector representatives and economists yesterday urged the new government to involve views of relevant stakeholders when entering into preferential trade agreements as poor negotiation of already signed free trade agreements (FTAs) is observed to have done more harm than good to local industries, resulting in further widening of the country’s trade deficit.

With the previous government having kept local industries in the dark on what has been negotiated in a FTA,   National Chamber of Exporters President Sarada de Silva said the country has gained “very little” from the already signed FTAs despite the “immense potential”.
“(What is) required is a good consultative process. I believe the present government will involve us when getting into such in the future. It is imperative for FTAs to be properly negotiated. The benefits should be mutual, not one sided,” de Silva stated.

  •    Says FTAs need to be better negotiated
  •    Ensure benefits are mutual and not one sided
  •    Stresses the need to learn from past mistakes

During a presentation where Colombo-based think tank Verite Research highlighted measures of addressing non-tariff barriers between India and Sri Lanka, with special reference to the Mutual Recognition Agreement (MRA) on Conformity Assessment Procedures, Silva charged that had the trade chambers and other key associations been informed prior to the signing, the drawbacks of the same would have been pointed out, allowing proper negotiations that would result in a win-win situation for both nations.

“We were only made aware after the agreements were signed.  Previously, we didn’t have the opportunity to share our concerns with the government in this regard. We hope the situation will not be the same in the future,” de Silva said.

Lanka Fruit and Vegetable Producers, Processors and Exporters Association (LF & VPPEA) Chairman Annes Junaid who also shared his views at the event said that despite the country having signed an FTA with India, the environment had not been rightly created for local exporters, a concern that should be addressed without delay.

“We must have proper access to the middle income segment. There is good demand for our products. They (India) want it but it is the bureaucracy that doesn’t allow us to go in,” he asserted.
Confident that the new government will take a different approach in this regard, Verite Research Executive Director Nishan de Mel said that by learning from the past Sri Lanka certainly can do better.

”We should learn from the mistakes from the past and should do better. The government should be open to views from research organisations and other relevant key stakeholders.  Such entities can contribute towards that learning process,” de Mel noted.

Sri Lanka is gearing up to enter into an FTA with China. While the feasibility study is still underway, terms of negotiations have not been put forward to the private sector as yet. At the same time, Sri Lanka is yet to sign the Comprehensive Economic Partnership Agreement (CEPA) with India, which is considered an extension to the already existing FTA between the two countries.

MRA on compliance related NTBs
Having conducted extensive research into the problems faced by Sri Lankan food exporters to India under the Indo-Lanka FTA, Verite Research yesterday stressed the need for having a mutual recognition agreement (MRA) on compliance related non tariff barriers (NTBs).
Currently food exports to India seem to be more troublesome than their worth as the products are checked for compliance with standards and technical regulations of India.

Local products must undergo these checks, which could take from five days to three months, as Indian authorities do not accept test reports and compliance certificates issued by Sri Lankan laboratories.
Exporters say these results in additional costs, delays and uncertainty.

India, however does not face this issue as the Sri Lanka Standards Institute (SLSI), has agreed to accept compliance certificate issued by Indian authorities through an agreement entered in 2002 with the Exports Inspection Council (EIC) of India. To overcome this unfair situation, Verite Research pointed out the need to make this one sided arrangement a mutual one, which will result in exporters from both countries being treated the same.

“It is important the same facility available to Sri Lankan exports destined to India to ensure that exports from both countries can equally benefit from duty free concessions extended by the India – Sri Lanka FTA, MRA and CAPs (Conformity Assessment Procedures).” Verite Research Executive Director Nishan de Mel said.

“We suggest for Sri Lanka to explore the possibility of setting up a dedicated Export Inspection Scheme or Body, similar to the EIC of India. This scheme can not only facilitate the India- Sri Lanka MRA, but also similar future agreements with other trading partners,” he added.

MRAs are not new to India as the country already has such agreements with Singapore, Malaysia and China.
Interestingly, the proposed Comprehensive Economic Partnership Agreement (CEPA) between India and Sri Lanka includes a MRA to overcome compliance related NTB.

However, signing of CEPA has been put into the backburner indefinitely due to the lobbying of some Sri Lankan industrialists, entrepreneurs and professionals.