Controversy in Lanka Over Economic Pact With India Premature, Officials Say

Officials in Sri Lanka have described as “premature” the  controversy currently raging in the island over the Lankan government’s intention to sign ETCA with India.

Published: 22nd February 2016 06:01 PM  |   Last Updated: 22nd February 2016 06:39 PM   |  A+A-

COLOMBO: Officials in Sri Lanka have described as “premature” the  controversy currently raging in the island over the Lankan government’s intention to sign  an Economic and Technical Cooperation Agreement (ETCA) with India.

“ As yet, there is no document to comment on.  What was exchanged between the Commerce Secretaries of the two countries was a one-page document containing eight points on economic and technical cooperation expressed in  general terms. It is still an internal document subject to negotiations. In the absence of details, any controversy over ETCA is premature,” Express was told.

But both sides are working separately on details. What the Lankan Minister of Development Strategies and International Trade, Malik Samarawickrama, intends to release on Tuesday, is a document on what Lanka expects from the ETCA. The Indian side is yet to release a detailed document containing its perspective. But the two countries are aiming at signing a preliminary “framework” agreement in June.

The Lankan Deputy Minister of Foreign Affairs, Harsha de Silva, told Express that while there is no formal document yet, some issues which had plagued the India-Lanka Free Trade Agreement (ISLFTA) are expected to be addressed in the ETCA. Among these are the Non-Tariff Barriers in India; the need for an agreement on Mutual Recognition of Standards; and the need to lift restrictions on ports of entry.

De Silva said that the Lankan government will have consultations with local stakeholders before finalizing a draft ETCA. Earlier, he told the media that the opening up of the services sector will not result in Lanka being flooded by Indian professionals because Lanka will not be going in for Mode 4 of the General Agreement on Trade in Services which allows movement of “natural persons”. Entry will be allowed only in IT and ship building.

According to Prof.Rohan Samarajiva of the think tank LIRNEasia, even the  much maligned Comprehensive Economic Partnership Agreement (CEPA) had restricted Indian personnel to Indian funded firms. He also points out that India had shown flexibility in response to Lankan demands when it hiked the quota for apparels under ISLFTA, and recognized Colombo as the regional transport hub under CEPA, and that, at the cost of Indian ports.

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