Business leaders hail scrapping of CEPA:

Call for new deal with India

Business leaders and trade experts have hailed the announcement by Prime Minister Ranil Wickremesinghe that the government had scrapped the proposed Comprehensive Economic Partnership Agreement (CEPA) with India.

Instead they have backed the government’s intention of adopting a more limited and focussed trade and technical cooperation pact with Sri Lanka’s giant neighbour that would be more beneficial to the country.

Past President, Ceylon Motor Traders Association and Managing Director, Sathosa Motors PLC, Tilak Gunasekera told the Sunday Observer that Sri Lanka should “do away with CEPA and go for a better trade pact that would benefit Sri Lanka and not one that would benefit only India.”

“The move to abolish CEPA should be commended as it is detrimental to the country.

The Sri Lankan business community will stand to lose heavily if the flood gates had opened for Indian professional services to dominate the local market,” he said. “Plans to go ahead with the signing of CEPA during former President Mahinda Rajapaksa’s time was criticized by the Chambers and business community as it would have been disadvantageous to Sri Lanka. “We must come up with plans and strategies to boost the Sri Lankan economy through mutually beneficial trade agreements.“Sri Lanka has not benefited fully from the Indo-Lanka Free Trade Agreement. Trade has been always in favour of India which exports a large volume of automobiles to Sri Lanka,” Gunasekera pointed out.

The Comprehensive Economic Partnership Agreement (CEPA) was aimed at expanding the FTA to include services and investments.

Secretary General and CEO, National Chamber of Exporters, Shiham Marikar said the Chamber had not been against any free trade agreement.“However, we have been asking successive governments to obtain the views of the private sector before signing trade agreements so that the industry concerns are looked into. We have regular discussions with exporters to sort out issues,” he said. The NCE comprises over 550 members of all product lines in the country.

“Prior to going for a CEPA we need to address the issues of the FTA with India. There are many non-tariff barriers that impede trade with India,” Marikar said.

Managing Director and CEO, Chevron Lanka PLC, Kishu Gomes said, “This is a good move as the Prime Minister has assured that Sri Lanka will not sign the Comprehensive Economic Partnership Agreement (CEPA) with India.

“The motive of getting into any sort of free trade agreement by any country is to drive export revenue. Unless it is done in such a way to ensure that SL can reap greater value, it would be suicidal. The question is why should India help SL to raise revenue by opening their markets unless it is a strong business case?”

“Any agreement with a bigger country which has larger economies of scale can be negative to us. We don’t have the capacity as a country to compete against China and India. The portfolio of potential products and services we have as opposed to those two countries is smaller. So we will be the losers,” he said.

The Prime Minister told Parliament last that the Government is negotiating a new agreement on economic and technological cooperation with India. However, he said that before agreements are finalised, the Government will have talks with local business chambers and trade unions on the proposals.

Rejecting claims made by the Government Medical Officer’s Association (GMOA) with regard to the proposed agreement with India, the Prime Minister said: “There is no CEPA agreement. Some are attempting to say there is one and create instability in the country.”

The Premier said the GMOA had attempted to give the impression that Indians will get employment in Sri Lanka and that Sri Lankans will lose job opportunities locally. The Prime Minister said that under the new proposed agreement with India, local youth will get more job opportunities in Sri Lanka.Chairman, Heladiv Group and President, Tea Exporters Association, Rohan Fernando said: “The review of the CEPA as stated by the Prime Minster is good. However, trade relations with India must be viewed in a positive way taking into account that India has the second largest population in the world and has a fast growing middle class in the world just an hour away from Colombo, which should be our target for expansion.

“Relations between India and Sri Lanka should be at its best for our progress. A give-and-take policy must be adopted in reviewing the CEPA or future trade and services agreements.