Singapore PM expects FTA with Sri Lanka to be wrapped up this year
Feb 18, 2017 16:05 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Singapore's Prime Minister Lee Hsien Loong expressed hope that a free trade deal with Sri Lanka could be wrapped up this year, following a informal meeting with Prime Minister Ranil Wickremesinghe.
"We talked about the FTA that we are negotiating, which we hope to complete this year. He invited me to visit Sri Lanka – hopefully to sign the FTA," Prime Minister Lee said in a facebook.com post.
Sri Lanka wants to sign a tripartite trade deal linking Singapore, Sri Lanka and New Zealand.
"Caught up with Sri Lankan PM Ranil Wickremesinghe and Mrs Wickremesinghe over dinner last night. They stopped over on the way home from an official visit in Australia.
PM Wickremesinghe is a good friend of Singapore, having visited us many times."
Singapore however is a country that has prospered with free trade and has unilaterally brought down import duties to make businesses efficient and prevent businesses from exploiting citizens, leading to high living standards.
Since it has already given economic freedom to citizens, it is not a country that can use their freedom as a bargaining chip to given import freedoms to citizens of other countries by offering tit for tat tariff reductions.
However an FTA give lock in import duties, making it more difficult for nationalist politicians and rent seeking businessmen to push up import duties and exploit poorer Sri Lankans in the future.
If an FTA pushes Sri Lanka to strengthen investor protection and make it difficult for the state to expropriate private property, an FTA could help Sri Lanka can benefit citizens, economic analysts.
Economists and freedom advocates have been pushing Sri Lanka to strike a free trade deal with the US - before Donald Trump came power - because a US deal will make Sri Lanka change domestic laws improve the economic freedoms and property rights of not just US investors but all citizens.
This is the key reason trade deals with the US trigger larges inflows of Foreign Direct Investment, shortly after. (Colombo/Feb18/2017)