Cabinet nod for Sl-s’pore FTA subject to AG’S approval

„Signing of FTA to coincide with the visit of S’pore PM next week „SL has been classified as a most protected economy by WB „Protests seen against proposed China, India trade pacts not seen against S’pore „S’pore was SL’S third largest import source in 20

The Sri Lankan cabinet of ministers this week gave the green light to the signing of the free trade agreement (FTA) with Singapore, which was negotiated in secret, subject to the approval from the Attorney General.

“This agreement consists of provisions regarding trade in goods and services, service liberalization, investments, public procurement, etc.,” the cabinet office said.

Although there has been a dearth of information on the FTA, Mirror Business previously reported that the FTA may include pioneering digital services liberalization.

The FTA is scheduled to be signed next week when Singaporean Prime Minister Lee Hsieng Loong visits Sri Lanka. While a government source said that there was speculation earlier this month on Lee not visiting Sri Lanka next week, due to an unexpectedly busy schedule, such speculation was laid to rest yesterday. The spokespersons of the Foreign Affairs Ministry as well as the Development Strategies and International Trade Ministry yesterday confirmed that Lee was visiting Sri Lanka. Negotiations for the FTA kicked off when Prime Minister Ranil Wickremesinghe visited Singapore in 2016. Sri Lanka has been classified as one of the most protected economies in the world over the past decade by the World Bank, a situation which the current government is attempting to reverse. Singapore, on the other hand, operates one of the most liberal economies in the world.

Government sources recently said that Sri Lanka’s negative list for protecting local industries through the FTA had been a hot topic during negotiations. Singapore was Sri Lanka’s third largest import source in 2016 after China and India, with Singaporean imports amounting to US $ 1.18 billion. The main imports were petroleum products, machinery, electronic equipment, chemicals, plastic and food products.

Sri Lanka exported just US $ 114 million or 1.1 percent of the country’s total exports to Singapore during the same year, which included petroleum oils, tea, rubber tyres, precious and semi precious stones, flour and fish. The Sri Lankan nationalist protectionist lobbies and trade unions haven’t raised their voices on the Singaporean FTA negotiations.

Sri Lanka’s ongoing trade negotiations with geopolitical heavyweights India and China have run into heavy resistance among such groups with allegations on the lack of transparency, dumping of Chinese and Indian goods in the local market and the potential destruction of job opportunities for locals. An economist working at the state-funded Lakshman Kadirgamar Institute had recently outlined that these agreements with India and China were first and foremost geopolitical arrangements. However, the Singapore FTA too has been negotiated in secrecy, in keeping with a trend followed globally, although some, such as the European Union, are attempting to keep their residents more informed about trade negotiations. Criticism against the lack of transparency in trade negotiations is now a worldwide phenomenon with academic research dedicated on the subject, since FTAS affect the lives of all citizens in a country and cannot be withdrawn unilaterally, without diplomatic repercussions.

Allegations are also mounting globally that FTAS are negotiated to serve corporate interests ahead of national interests. In Sri Lanka too, powerful monopolies and oligopolies have continuously been featured on negative lists.