Sunday Observer Online


Sunday, 3 January 2016





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Government Gazette

ETCA to boost economic ties :

Sri Lanka-India bilateral trade almost $ 5 b

The Government would decide on signing the ETCA after talks with its Indian counterparts.

Bilateral trade between India and Sri Lanka is close to $5 billion at present. The Indo-Sri Lanka Economic and Technology Corporation Agreement (ETCA) is expected to give a major boost to economic ties. The government is pursuing a 'social market economy' giving priority to competitiveness and social justice in trading and business, Deputy Minister for Foreign Affairs," Harsha de Silva told Sunday Observer Business.

The Government would decide on signing the ETCA after talks with its Indian counterparts.

The ETCA will ensure cooperation between the two neighbours in areas such as investment, technology, research, higher education, tourism and people-to-people contacts, the Deputy Minister said.

The government aims to make local business and trade more competitive and productive, here and abroad, while maintaining social justice, passing the benefits to everyone and not confining it only to a handful of people.

India and Sri Lanka discussed the contours of the proposed ETCA at the fourth round of Commerce Secretary-level talks recently.

The talks were led by Indian Commerce Secretary Rita Teaotia and Secretary, Ministry of Industry and Commerce, T. M. K. B. Tennakoon.There would be a fifth round of talks either this month or in February, when the two delegations would put together a framework agreement which would be finalised by June, 2016, the Deputy Minister said.

The government does not agree with the clauses that were included in CEPA by the former regime and the 'harmful' agreement has been completely removed.

"We have to understand where we could be competitive and the government always advocates a knowledge-based, highly competitive economy to take the country to the next level," de Silva said."As a responsible government we will not simply say 'no or yes' to any agreement with India, China or any other country. We must push for agreements which are symmetric and benefit a small country such as ours," he said."We must study in detail our experiences and that of similar countries to negotiate the best deal for us," the Deputy Minister said.

Any bilateral or multilateral trade agreement that benefits Sri Lanka must be pursued, Dr de Silva said.Allaying fears of local professionals, particularly doctors, lawyers and engineers who have expressed concern over the loss of opportunities if ETCA is signed, he said that false reports regarding the pact are misleading the people.

If any country signs any agreement under the General Agreement on Trade in Services (GATS), the services could be traded internationally in four different ways, known as the four modes, de Silva said.

The GATS agreement covers four modes of supply for the delivery of services in cross-border trade:

Mode 1: Cross-border supply. Service delivered within the territory of the member, from the territory of another member. Service supplier not present within the territory of the member.

Mode 2: Consumption abroad. Service delivered outside the territory of the member, in the territory of another member, to a service consumer of the member

Mode 3: Commercial presence. Service delivered within the territory of the member, through the commercial presence of the supplier. Service supplier present within the territory of the member.

Mode 4: Presence of a natural person. Service delivered within the territory of the member, with the supplier present as a natural person.

He said since Sri Lanka had already allowed the first three modes, the question was about Mode 4 (movement of natural persons).

The economic agreement with India does not involve Mode 4 services or the movement of natural persons, said de Silva.

An Indian doctor, lawyer, engineer or any other professional will not be able to come and set up a dispensary, law firm or any thing else to deliver their services all over the country.

Some are now threatening to strike again citing several reasons, including the planned economic agreement with India which can push Sri Lanka into a high growth phase and bring economic freedom to the poor.

Initially only two sectors, Information Technology and the shipbuilding industry will be opened for trading under this pact.

No Indian hair dresser can simply come here and open saloons, or tailor shops, said De Silva.

De Silva said Mode 1 services involves a situation where an Indian or Sri Lankan will send test results to the other country for medical advice including service such as ‘telemedicine’.

He said Mode 2 involves patients travelling to India or Sri Lanka for medical treatment. This has been happening for many years.

Mode 3 involves investing in a hospital in another country to provide services.When the Apollo hospital (now Lanka Hospitals) was under Gothabhaya Rajapaksa, ex-President Mahinda Rajapaksa’s brother, and Indian doctors came to practice at Lanka Hospitals, the GMOA or others did not protest, the Deputy Minister said.

There was a fear among some people that if the Comprehensive Economic Partnership Agreement (CEPA) with India was signed there will be a natural persons movement of Indian labour, including professionals, into Sri Lanka in a big way, to every field, thus creating major employment issues for Sri Lanka.

He said graduates and qualified persons will have a lot of opportunities and could contribute to the any profession under the highly competitive social market economy.

The government would not allow any international agreement to fill the pockets of politicians, he said.

A number of Sinhala politicians and groups have raised concern about the CEPA agreement, but most of them don’t known what is in it.

“We now need to strengthen economic ties with the rest of the world. The battle is here. While the economic team domestically fixes internal problems, our job is to take Sri Lanka across the globe to build trade and investment ties, help economic growth, liberalize the economy, and open the doors for local enterprises to move overseas and get investments from the diaspora,” he said.


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