exports to India have risen sharply
Sri Lankan exports to India have increased many times after the
signing of the Free Trade Agreement between Sri Lanka and India,
according to K. J. Weerasinghe, Director General of Commerce, Department
at a seminar on "CEPA (Comprehensive Economic Partnership Agreement)
with India Opportunities for Trade and Investment" held recently
in Colombo, he said the purpose of CEPA is to widen and deepen the
The agreement has covered goods and investment but the services
aspect could be dealt with further. He said input was required from
the business community to make representations to the Indian side
to request to remove the items from the negative list that are disadvantageous
to Sri Lanka.
He said that the US comes first in trade relations with Sri Lanka
followed by EC (European Commission) and then India. A joint study
was undertaken during the earlier government by two prime ministers
of India and Sri Lanka which made some valuable recommendations
but due to the government change the policy was not clear. He said
that the study could be useful as a reference document.
Saman Kelegama, Executive Director, Institute of Policy Studies
speaking on 'Trade in Goods Phase II' said that the negotiations
were restarted and CEPA would go into operation in January 2006.
most countries 60 percent average is services and even in Sri Lanka
it is 55 percent and looking at the global trade in goods and services,
the percentage of services is 25 and the service trade is very important.
Within the World Trade Organization (WTO) framework to cover the
trading and services in the world it was decided that there should
be specific means to identify the transfer of goods and services
in the cross border supply. Persons going abroad for education covers
50 percent of global services, patients going to another country
for treatment constitutes 20 percent and 5 percent move on less
has defined how to conduct these trading services and it said that
if the services took place between countries or among countries
there are rules and regulations and limitations to market access
for a country to make profits. Basically GATTS (General Agreement
on Tariffs and Trades) is flexible and voluntary and the respective
countries would decide. GATTS came into operation in 1995 but it
was launched in 2000.
said some countries are reluctant because they fear they would lose
national sovereignty, like if foreign education is opened up. Then,
only certain segments of the community would have that education
and there would be the fear of the country losing national sovereignty.
Due to these reasons the developed countries are very reluctant
to open up, he said.
the Indo-Sri Lanka FTA additional areas could be tourism, engineering
and knowledge based services. With regard to the conditions between
the two countries there are some problems like licensing. Both Sri
Lanka and India unilaterally have liberalized and there are lot
of problems in many areas which have to be sorted out.
H N Thenuwara, Director Economic Research, Central Bank said that
the agreed scope on CEPA between the two countries were based on
furthering free and preferential trade in goods by incorporating
economic cooperation in areas of preferential trade in services
and enhancing cooperation in investment and to take up specific
is further potential for further liberalization of financial services
and to facilitate the discussions under CEPA several working groups
were set up on goods, services, investments and MRAs.
said that the international trade in financial services could play
an important role in promoting efficient financial markets leading
to expansion of credit, lower costs of borrowing and better risk
sharing. In 1999, Sri Lanka made a series of commitments on several
sectors of services including financial services. He said that unlike
a product which is supplied using the only mode of cross border,
a service can be supplied in four different modes, like Cross Border
Supply, consumption Abroad, Commercial Presence and Presence of
said that trade in financial services falls broadly within the definition
of capital account transactions, which are restricted to a certain
degree in India and Sri Lanka. They were unilaterally liberalized
and have notified the WTO. Liberalization involves relaxing restrictions
placed on Sri Lankans by Sri Lankan authorities and request Indian
authorities to relax restrictions placed on market access in India.