20 January 2023 09:27 am Views - 155
Chief Negotiator/International Trade Office K. J. Weerasinghe, LIRNEasia Chairman Prof. Rohan Samarajiva, member of Sri Lanka’s FTA negotiating team Dr. Arittha Wikramanayake, Research Director Verite Subahashini Abeysinghe and Chairman KIK Group of Companies Lalith Kahatapitiya
By Nishel Fernando
Due to insufficient data and lack of industry engagement, Sri Lanka’s free trade agreement (FTA) negotiators are faced with the daunting task of service sector liberalisation as the country prepares to resume negotiations for proposed comprehensive FTAs with India and China over the next two months.
According to the Chief Negotiator at the International Trade Office of the Presidential Secretariat, K.J. Weerasinghe, Sri Lanka is expecting to resume FTA negotiations with China in March after a hiatus of six years while FTA negotiations with India is scheduled to resume in mid-February after over four years.
Speaking at a panel discussion organised by the National Chamber of Exporters (NCE) on Wednesday, he revealed that the government has prepared a preliminary list of 451 export goods for duty concessions while China has also prepared a similar number of goods to be eligible for duty concessions under the proposed FTA.
Under the proposed comprehensive FTA with India, Sri Lanka is seeking duty concessions for 431 goods.
To obtain stakeholder inputs with a view to finalise these lists, the government has planned to hold stakeholder consultation rounds with trade chambers, the business community and other stakeholders within this month.
While services are increasingly becoming more prominent in trade agreements, over goods, Weerasinghe highlighted that it remains an overwhelming task to determine the scope and level of liberalisation of services in particular due to lack of data availability and the complex nature in Sri Lanka when compared to countries such as India and China.
“Even the Central Bank finds it difficult to undertake studies due to lack of data,” he noted.
A core member of Sri Lanka’s FTA negotiating team, Dr. Arittha Wikramanayake lamented the lack of enthusiasm of service sector stakeholders to engage in the consultation process .“We have called for responses from chambers and industries, but we have not received any response so far,” he said. In this backdrop, the government is currently in discussion with World Bank (WB) and the International Trade Center (ITC) to secure funds and technical support to conduct necessary studies to determine the required scope and the level of liberalisation of services.
In addition, Weerasinghe shared that the government is launching a stakeholder consultation series with service sector players. Accordingly, a broad consultation round is scheduled with service sector representatives on February 2 to obtain their views and inputs on the services sector liberalisation.
Subsequently, separate stakeholder consultations are planned be held with different segments of the sector from construction to financial services industries along with the regulators.
Meanwhile, he assured that the liberalisation of the service sector would be done meticulously based on the country’s present requirements with close interaction with the stakeholders.
“When we were talking about IT professionals, we earlier said we won’t allow any IT professionals to come here as we had sufficient number of IT graduates in the country. But, this has been reversed now. IT professionals are leaving the country now, so there might be requirement to allow IT professionals to come to the country. That’s the reality. We can pick and choose what sectors we are liberalising up and to what extent,” he elaborated.
LIRNEasia Chairman Prof. Rohan Samarajiva opined that service sector liberalisation would pave way for an efficient services sector while reducing corruption and the size of the informal economy.
“One of the reasons for us to have corruption is due to the fact that we are resisting negotiated rules that allow movement of processionals in a systematic way. How you make service sector efficient is by introducing competition. How you do that will require rules and foreign participation,” he said.