Sri Lanka plans to seal economic pact with India by mid-2016

ECONOMYNEXT – Sri Lanka hopes to sign a wide-ranging economic pact with India in mid-2016 with a framework deal to be readied for discussion by the end of this year, Prime Minister Ranil Wickremesinghe has said.

Sri Lanka’s Prime Minister Ranil Wickremsinghe met India’s Narendra Modi on Tuesday in his first overseas visit.

"We have looked at further co-operation between our two countries, a permanent agreement on co-operation on economic affairs, with emphasis on trade and investment and also on technology, which is essential for development," Wickremesinghe told a media briefing.

A draft agreement will be drawn up by the end of 2015 for discussion. The two countries have set a deadline of mid-2016 to complete discussions and sign the deal.

A comprehensive economic partnership agreement between India and Sri Lanka has been in the works since 2005 but business interests close to ex-President Rajapaksa who were profiting from high import duties slammed on the people scuttled the deal.

Wickremesinghe said his administration had a mandate from the people continue trade and investment arrangements with India and other countries.

"We hope this will lead to the next step, where the private sector from both sides could co-operate," he said.

"We think by the end of this year the two sides should come at least come to an agreement on principle and a framework document and certainly by mid next year we should have the agreement in place.

"We have to remember that economic co-operation between India and Sri Lanka is nothing new. It has been going on for over 2,500 years."

In many regions of the world businesses Mercantilism and nationalism is losing ground and businesses are no longer able to fleece the poor and earn unjust profits as they did in the past using nationalist rhetoric.

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With falling trade barriers and smaller and more effective government’s ordinary people’s living standards are rising in many countries.

Sri Lanka however has a bloated government and the rupee is now falling due to heavy money printing.

The ASEAN region, where trade barriers are already down and visa fee travel is in place, is going through another round of liberalization at the end of this year after which investors of each other’s countries will be treated equally.

East Asia and the US is also negotiating a Trans Pacific Partnership which is expected to bring the Asia Pacific region and the America’s even closer. (Colombo/Sept15/2015 – Update II)

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