ECONOMYNEXT – Partnership trade agreements Sri Lanka is seeking with India, China and Singapore will give it a distinct advantage in attracting foreign investment but would be done while protecting local industry,, Central Bank governor Indrajit Coomaraswamy said.
The trade agreements were part of the new government’s strategy of improving the island’s competitiveness, he told the Colombo International Tea Convention to mark 150 years of Ceylon tea.
“The biggest and probably the most controversial items are the partnership agreements we are negotiating,” he said.
Coomaraswamy said 190 countries around the world are all chasing foreign direct investment and Sri Lanka needs to differentiate its offer in order to be attractive.
“This preferential access is clearly a major differentiator,” he said, referring to the trade deals under negotiation as well as the GSP Plus facility that Sri Lanka renewed giving duty free access to the European Union.
“We are deepening and widening our existing free trade agreement with India to include services, training, technology and investment. We are doing the same with China and Singapore.
“If we can successfully negotiate these agreements Sri Lanka will have preferential access to a market of three billion people in India, China, Pakistan, Singapore and the GSP Plus agreement to the European Union. No other country in the world has that,” Coomaraswamy said.
“That’s a massive selling point.”
Coomaraswamy said this was not just an opportunity for Sri Lanka’s own exporters but an even bigger opportunity to leverage the trade-investment nexus to show foreign investors and attract FDI.
“People can locate here and sell on a preferential basis to the fastest growing economy just 20 miles away. We are right in the middle of the new Chinese silk route.
Coomaraswamy said an anti-dumping bill was in parliament that would give protection to sectors that could get hurt by the free trade deals.
“If we are going to open up some sectors we must have an anti dumping act to protect our own producers,” he said.
The government was also pursing trade adjustment facilities that help countries to improve competitiveness and retrain workers who get affected.
(COLOMBO, August 10, 2017)