The Sri Lankan free trade agreement (FTA) negotiators want India to implement interim remedies for the non-trade barriers that exist in the current Indo-Lanka Free Trade Agreement (ISFTA) prior to the signing of the Economic and Technology Co-operation Agreement (ETCA), in order to build up the confidence on the ETCA among Sri Lankan stakeholders.
Speaking at a recent press conference at the International Trade and Development Strategies Ministry premises, Sri Lanka’s Chief FTA Negotiator K.J. Weerasinghe said the Sri Lankan negotiating team has taken up several key issues in the ISFTA, particularly with regard to non-trade barriers on food and processed food exports and the quota on apparel exports from Sri Lanka.
“India wants to implement the mechanism after signing the ETCA, however, we are insisting the Indian authorities to implement the measures early,” he said.
Weerasinghe pointed out that India currently doesn’t recognise the certificates issued for food and process food items by Sri Lanka laboratories, which acts as a major non-trade barrier for Sri Lankan food and process food exports.
The Indian authorities check each and every consignment of these export shipments to assess compliance with the Indian product standards and regulations at customs. According to exporters and analysts, the resulting delays, uncertainty and additional costs, such as storage and demurrage, act as a barrier to trade with India.
“We want five labs to be recognised by the Indian authorities as an interim measure until the Mutual Recognition Agreement is finalised,” he said
A delegation from the Food Safety and Standards Authority of India (FSSAI) is expected to visit Sri Lanka to inspect the select five labs in mid-May.
“They will visit these five laboratories to evaluate the equipment, expertise and capacity and based on those criteria, they will recognise the five labs.”
Weerasinghe also said the Sri Lankan FTA negotiation team has taken a strong stance with the Indian negotiators in order to remove the eight million apparel piece quota imposed on Sri Lankan apparel export to India.
“We want the apparel quota to be removed. However, the Indian negotiators want to review the quota. We are maintaining the position that it should be removed.”
According to local apparel exporters, Lankan apparel exports to India have already reached the imposed quota at the end of 1Q18.
Weerasinghe noted that the removal of these bottlenecks would provide a big boost for Sri Lankan exports to India.
Speaking of the extent of liberalisation of tariff lines to India, he said, “One of the important elements of the Indian agreement is the acknowledgement of the asymmetry between the two countries so the extent of liberalisation that India is going to do will not be matched by us.”
According to Weerasinghe, Sri Lanka is likely to maintain a 30 percent negative list with India while protecting domestically sensitive industries.
The Sri Lankan FTA negotiators plan to conclude the technical negotiations of the ETCA by the end of the year. The 10th round of the ETCA talks is scheduled to be held in Sri Lanka from May 23-25.
Meanwhile, the Sri Lankan FTA negotiators expect the Sri Lanka-China FTA talks to continue to beyond this year as there is a lot to be discussed with regard to the proposal made by the Chinese negotiators to liberalise 90 percent of tariff lines where the two parties have to thoroughly discuss the sectors and the timelines of liberalisation.
Weerasinghe said the government has proposed to hold the next round of FTA talks with China in June and Sri Lanka is currently awaiting a response from the Chinese government to continue the negotiations.