India and Lanka disagree on some changes in ETCA

Negotiations between India and Sri Lanka on an Economic and Technical Cooperation Agreement (ETCA) hit the hard road at an officials-level meeting held in Colombo on January 4 and 5, the New Indian Express reported.

Informed sources told Express that the Sri Lankan side was pressing the Indians to make certain concessions explicitly to enable it sell the pact to the Sri Lankan masses who tend to imagine that ETCA would be a rank give away to the Big Brother across the Palk Strait.

The Indian side resisted these moves on the grounds that trade pacts are too serious, too far reaching and wide-ranging in their impact to be tailored to suit short-term political requirements.

However, the Sri Lankan side had good reasons to pursue a political goal. Even as the talks were on in the city, posters against ETCA, describing it as “aggression”, appeared in parts of Central Colombo. At any rate the Sinhalese language slogan “ETCA EPA” (No to ETCA) has caught the imagination of the people.

With the opposition, led by former President Mahinda Rajapaksa, backing the anti-ETCA campaign, the pact is expected to be an issue in the forthcoming local bodies and provincial elections scheduled for June-July and September respectively, unless it is tailored to suit the electoral agenda of the ruling coalition.

But tailoring it to an electoral agenda might mean India’s giving in to Sri Lanka in ways which could adversely affect the interests of its own private sector. This aspect has to be borne in mind as the primary driving force in the liberalized Indian economy is the private sector.

There were differences over priorities. The Sri Lankan side lay great stress on correcting the flaws or removing the irritants in the Free Trade Agreement (FTA) which became operational in 2000. The Sri Lankan side has been seeking the removal of a plethora of Non Tariff Barriers (NBTs) which impede the entry of Sri Lankan goods into the Indian market. Sri Lankans feel that if the NTBs are not there, the trade gap would not be as big as it is now.

But the Indians have had difficulty in removing many of the NTBs. Or, as the Sri Lankans allege, they have been tardy and reluctant.

At any rate, Indians think that pegging the signing of ETCA to removing the flaws in the FTA is neither warranted nor practical because the two are different kettles of fish. FTA is about trade in goods while ETCA is about investment, services and economic cooperation. It is to be a re-designed reincarnation of the now abandoned Comprehensive Economic Cooperation Agreement (CEPA).

At official level trade talks, the minutiae tend to get a lot of attention. Discussions take place over every sentence and paragraph and the order in which they are written. It is said that the Sri Lankans wanted some things to be stated not only in the introductory statement but also in the main body of the agreement as a clause which the Indians resisted.

Above all, there were differences over the time period to end the negotiations and sign the pact. Not having been able to sign it by December 2016 to time with the second anniversary of the Sirisena regime, the Sri Lankans wanted the talks to be wrapped up fast by mid 2017 before the local bodies and provincial elections. But the Indians would not be hustled as trade talks are complicated affairs and take years to conclude internationally.

India was not averse to holding meetings often, say once in a month, but it was against rushing through as both sides have vital interests to be safeguarded or pursued. As the Indian Commerce Minister Nirmala Sitharaman said during her visit to Colombo last year, both India and Sri Lanka have concerns, interests and issues to address, and that India is not in favor having a strict timeframe to wrap up the talks.

While no date was fixed for the next round of talks, it is likely that the next round could be held in February. (Colombo Gazette)

1 COMMENT

  1. The Indian an economy hegemony has destroy ours entire development by undermined that FTA trade and investment between Sri lanak and India since year 2000.

    We cannot move forward by FTA has only one party of that Indian benefits out of Trade & Investment since year 2000.

    By and large Govt. of Indian political infiltration and forcefully influence to FTA agreement ,that Sri Lankan was compelled to buy unnecessary goods from India. Many commodities are NOT required to Peoples of Sri Lankans .The Sri Lankan exports of goods and investments has been having many trade barriers by high custom duties and State manipulated regulations in ports in India.

    We have been lost ours Economic sovereignty by FTA trade deal between two countries and hence lost Billions of Rupees Trade imbalance last 16 years . Trade balance is huge one.

    In the way FTA working on benefits to Indians, that we will lost and collapse ours National economic very soon.
    This FTA has been key ills of economic development in Island. Ongoing FTA with Indian will be undermined whole Economic sustsnibility of our nation.

    What ever cost we have pay of FTA is worthless and useless . In fact ours national Economic survival is priority, if not that ours whole system of Economic ,that we will be undermined by FTA .

    We seek and want urgently review according to WTO Rules. Or other wise we will seek WTO settlement as soon as possible. .

    Until such amicable solution comes with Sri lanka and Indian that both parties it is impossible reach an agreement of ETCA .

    The ETCA has long way to go.
    It Is not near future can be reality of ours business and Trade are concern with Indian.
    Indian goods and services has been dominated and control that big slices of domestic market of Sri Lanka.

    It has flood of Indian goods local market by over-riding local business and manufactures by Govt. of Indian politically force to the current political regime in power.

    There are many illegal goods and manpower penetrated to Sri Lankan market by the same time ,while an Illegal immigrants and undocumented workers are flooded into domestic labour last 16 years, after FTA came into being .

    This Economic hazards has created new Economic ills in ours society by govt . of Indian by wrong doing of political domination in power alliance with current ruling parties in power.

    We want to protected domestic market by removed the foul play by Govt. of Indian by forces to sing ETCA as quick as is NOT that possible.

    The aim of ETCA time being is not Fair or balance trade between of both nation. If ETCA will sing that out trade and Investment with Indian that will be created more wider than past result of FTA!
    We cannot think ETCA can be sing even couple of years in ahead that has to be considered by majority Sri Lankan in near future is Not Possible.

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