NCE expresses concerns over the upcoming signing of ETCA
View(s):Member exporters of the National Chamber of Exporters of Sri Lanka (NCE), have expressed concerns regarding the proposed Economic and Technology Cooperation Framework Agreement (ETCA) to be signed by India and Sri Lanka within the next two weeks and the ETCA Agreement proper proposed to be signed mid this year. The Chamber has written to the Minister of Strategy Development and International Trade Malik Samarawickrema –outlining the concerns related to some issues, and enquiring specific benefits that will accrue to Sri Lankan exporters through the ETCA. Issuing a media release, the NCE stated that the well-known non-Tariff Barriers (NTBs) under the current FTA have hindered access of Sri Lankan Exports to the Indian market: Although this impediment was expected to be resolved at least to a certain extent before entering into the now ‘abandoned’ Comprehensive Economic Partnership Agreement (CEPA), the solution to the issue is addressed in the framework ETCA.
However there is no certainty that negotiations will be successfully completed within the six months period to address the barriers to Sri Lankan Exports, the NCE pointed out. The complexities under the current FTA for Export of Goods (and services in the future under the ETCA) to the different states of India, due to the imposition of various State Taxes: the ETCA does not appear to provide a solution to overcome this issue which mainly affects Sri Lanka, since there is provision for states of both countries to impose taxes and such other levies, the NCE said. It further noted that available information suggests that the Sri Lankan Services sector will be opened to India only in regard to IT/BPO services, and Ship building / Ship repair services, and no provision will be included for the free movement of natural persons particularly professionals including Indian doctors to work in Sri Lanka.
However, there is no clarity as to the manner in which Sri Lankan exports of Services will be able to access the Indian market sans barriers, the NCE added. Concerning IT and BPO Services: It is presumed entry of Indian professionals will be prioritised and limited to skills required by Sri Lanka, and these will be negotiated and clearly spelt out in the ETCA Agreement proper, since fears have been expressed that the agreement will enable low wage demanding Indians to enter Sri Lanka threatening the job opportunities of Sri Lankans. Another issue raised by the members is that there is no proper mechanism to evaluate the professional qualification of IT personal that may lead to entry of unsuitable professionals. The NCE said. The Chamber has requested the Minister to consider the above issues, and respond to enable it to advise its members and hold detailed consultations with the Stakeholders of all relevant sectors pertaining to the negotiations before signing of the ETCA proper to clear remaining doubts.