Indian business consulted on removal of quotas for SL

Indo-Lanka trade talks:

By Chandani Jayatilleke

The next round of talks on the proposed new economic agreement between India and Sri Lanka is mostly like take place in Colombo next month with India having committed to consulting its own industries on removing quotas, such as on textiles, in the existing free trade agreement at the latest talks in New Delhi.

The Sri Lankan side shared drafts of Mutual Recognition Agreements (MRAs) and trade facilitation terms that are of immediate concern to local exporters at the latest round in Delhi last month, officials said.

The proposed Economic and Technical Cooperation Agreement (ETCA) between India and Sri Lanka will be signed by year-end, with the aim of forming a US$500 billion economy, encompassing Sri Lanka and Tamil Nadu, Karnataka, Andhra Pradesh, Telengana and Kerala, Prime Minister Ranil Wickremesinghe told the India Economic Summit in Delhi last week.

“Prime Minister Narendra Modi and myself have agreed on this,” he said at the summit organized by World Economic Forum along with the Confederation of Indian Industry (CII).

The preliminary round of official talks began in August with the arrival of an Indian delegation to the island and that was followed by the next round in New Delhi on September 29-30.

“We are trying to get the trade facilitation mechanism in place even before the ETCA is finalized,” said K. J. Weerasinghe, advisor to the Agency for International Trade and a member of the negotiation team. “It will be an integral part of ETCA thereafter. We need to address the current issues first; those issues that keep on arising.

“During the negotiations in Delhi last month, we discussed about the removal of quotas. That discussion will continue in the next round as well.

They (India) needed to consult their internal textile ministry and other stakeholders-They will examine it and come back with their proposals at the next round,” he said.

“Under the ‘early harvest’ program, there are three elements – removal of quotas, trade facilitation mechanism and Mutual Recognition Agreements, to address standards issues about food and clearance regulations,” Werasinghe told the Sunday Observer Business.

“Sri Lankan exporters of strawberries, coconut milk powder, and biscuits have had issues in this area.

Under the ‘early harvest’ program we want to establish a structured mechanism to address these day-to-day operations; removal of quotas and trade facilitation mechanism points of contact.” At the last round, Sri Lanka gave India a draft of its MRA and terms of reference for trade facilitation with points of contact.

“Implementation related issues arising out of the India-Sri Lanka FTA are still there.

We have managed to make it clear to the Indian side during the first meeting in Colombo, parallel to ETCA negotiations, that first we’ll talk implementation issues of the ISFTA.”

Weerasinghe, who is also a former Director-General of Commerce, said the two sides have not yet come to ETCA concerns.

“We discussed about Customs cooperation and trade facilitation areas, the investments chapter, a general exchange of views.

The issues will be talked about in the next round, probably in November in Colombo, such as the goods chapter, economic cooperation, general provisions.”

Weerasinghe said that there’s a broad framework now in place for the talks to go ahead.

“Essentially the agreement architecture has been agreed to – which will cover chapters such as goods, services, investments, economic cooperation, and general provisions like dispute settlement,” he said.

“So, for example, the goods chapter will necessarily cover goods, and will obviously have a linkage to the previous agreement - ISFTA - which is on goods.

There are issues there which we need to improve on and shortcomings.

For example, rules of origin, and review of negative lists - all that has to be looked at in the goods chapter and that will become part of the ETCA agreement.”

Private sector representatives from different sectors have been given participant status at the talks on different trade agreement the government is negotiating.

“They can participate, observe and give inputs,” Weerasinghe said. “They were nominated by the leading chambers. Sharing information with the chambers will be continued.”