Transparency urged in discussions on new Sri Lanka trade pacts

The national strategic approach is not visible in the approach of Sri Lankan policymakers and relevant agencies in pursuing discussions on ETCA with India, and on other proposed agreements with Singapore, China and some other countries, says a group of ‘independent’ economists.

In an open letter to President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe titled “Sri Lanka’s approach towards international trade agreements”, the group has urged the Government to quickly put its course of action correct, in view of ensuring long-term national benefits when pursuing negotiations on any bilateral, regional or multilateral agreements.

The full text of the letter is as follows:

“We, the undersigned group of independent economists working in the Sri Lankan academia, wish to contribute to the ongoing discussion on the proposed international trade agreements, particularly the controversial Economic and Technology Cooperation Agreement (ETCA) with India and the proposed FTA to be signed with China. In doing so, we intend to draw the attention of the Sri Lankan Government, its policymakers, professionals as well as the public regarding the imperative requirement of ensuring national benefits in entering into any such trade or economic cooperation agreement with any country or region. In view of this, we urge the Government to consider our viewpoint outlined below in pursuing negotiations with any country relating to preferential trade liberalisation.

We do not believe that mere growth of foreign trade would lead to improved living standards of people or wellbeing of our citizens in the future. The purpose of any economic strategy should be to promote national interests such as growth of national product, better social equality, reinforced environmental sustenance and strengthened national sovereignty, and not merely trade promotion. Therefore, we believe that policies, strategies and plans have to be geared to and compatible with realising these harmonised composite national development goals.

At the very outset, we wish to emphasise that we are not opposed to Sri Lanka developing her international trade horizons by way of broadening and deepening export markets. In this regard, we as economists in academia are ready to help the policymakers and strategic planners in whichever way feasible, subject to adhering to and satisfying the above described national agenda.

However, we feel that Sri Lanka should not bind her future through international legal commitments, may they be trade, investment, economic partnership or technology in nature, with any foreign party, country or a region, unless the intended benefits are not securable otherwise. Even under such circumstances, we urge that any such agreement is either for a pre-determined fixed duration, or having explicit termination clauses. This is because, any absence of such exit/termination possibility would amount to deprival of Sri Lankan citizenry of their fundamental democratic right to change national policy directions at an election.

The policymakers should also exercise greater transparency in developing international agreements as these would have very significant, and almost irreversible, broad-based national and international implications, which even spill beyond the boundaries of national judicial purview. While welcoming the release of the recently prepared ‘draft National Trade Policy’ for discussion, it is rather unfortunate that an adequate discussion is not stimulated or promoted by the Government on the necessity of these international trade agreements, intended strategic actions, their intended benefits, and possible ill-effects if any, particularly among professionals and industrial communities. Wide awareness of such parameters would inevitably help evolve nationally beneficial strategic directions the country could possibly take in this regard. We therefore urge the Ministry of International Trade to engage in public dialogue on these, particularly looking at the issues and implications from a national point of view.

It is undoubted that different countries have different legal settings, standards and regulatory settings. India, in particular, is known to be relatively closed and highly controlled through her constitution and legal provisions. Given that the Sri Lankan regulatory mechanism does not match with those in such regulated economies, any unprepared opening of trade could become comparatively disadvantageous to the more liberal and unregulated local economy, society and its national interests. Unless adequate regulatory safeguards are put in place to ensure that only those required quality/standard of goods, services or professional flows (in case such is considered) would come in to the local economy through the provisions of such preferential trade liberalisation agreements, the very safety, wellbeing and sustenance of our economy, society and citizens would be at risk. Therefore, we the university economists support the view held by other professional bodies in the country that no further trade liberalisation, particularly on exchange of services and professional skills, should be pursued without first instituting the regulatory and accreditation mechanism in place (in other words, putting the ‘house-in order’), so that the quality and standards could be checked to effectively control and screen-off any sub-standard influx.

We regret that such a national strategic approach is not visible in the approach of the policy makers and relevant agencies in pursing discussions on ETCA with India, and on other proposed agreements with Singapore, China and some other countries. Therefore, we urge the Government to quickly put its course of action correct, in view of ensuring long-term national benefits when pursuing negotiations on any bilateral, regional or multilateral agreements.

We agree that our nation cannot stay immobile. It has to move forward. Our interest is to progress on the forward march while avoiding the possibilities of our nation and its economy being drawn into inescapable and long-lasting traps.”

The letter has been signed by Prof. Athula Ranasinghe, Professor of Economics, University of Colombo and Dean/Faculty of Arts, University of Colombo; Prof. Navarathna Banda, Professor of Economics, University of Kelaniya; Prof. W Wimalaratana Thero, Head/Department of Economics, University of Colombo; Dr. Sumudu Perera, Head/Department of Business Economics, University of Sri Jayewardenapura; Dr. M. M. Jayawardana, Senior Lecturer, Department of Social Sciences, General Sir John Kotelawela Defence University; Dr. Wasantha Athukorala, Senior Lecturer in Economics, University of Peradeniya; Dr. T. L. Gunaruwan, Senior Lecturer in Economics, University of Colombo; Dr. Seetha Bandara, Senior Lecturer in Economics, University of Kelaniya; Dr. Mahinda Bandara, Senior Lecturer in Economics, University of Moratuwa; Indrajith Aponsu, Senior Lecturer in Economics, University of Colombo; and Ms. Harini Amarashinge, Lecturer in Business Economics, University of Sri Jayawardenapura.

Other signatories were Dr. Rathnasiri Ranasinghe, Dean/Faculty of Business Studies and Finance, Wayamba University of Sri Lanka; Dr. R. P. I. R. Prasanna, Head/Department of Social Sciences, Rajarata University of Si Lanka; Ms. S. Maheswaranathan, Head/ Department of Economics, Faculty of Commerce and Management, Eastern University; Dr. Thusitha Kumara, Head/Department of Public Administration, Uva Wellassa University; Dr. D. M. Ajith Disssanayake, Senior Lecturer in Economics, University of Kelaniya; Dr. A. J. M. Chandradasa, Senior Lecturer in Economics, Ruhunu University of Sri Lanka; Dr. T. Bhavan Senior Lecturer, Department of Economics, Faculty of Commerce and Management, Eastern University of Sri Lanka; Dr. A. M. M. Mustafa, Senior Lecturer, Department of Management, Faculty of Management and Commerce, South Eastern University of Sri Lanka; Dr. Priyanga Dunusinghe, Senior Lecturer in Economics, University of Colombo; Dr. Prasad Serasinghe, Senior Lecturer in Economics, University of Colombo; Dr. Suba Mallikahewa, Senior lecturer in Economics, University of Colombo; Mahinda Pushpakumara, Senior Lecturer in Economics, University of Colombo; Ms. Shahshithanganee Weerawansha, Senior Lecturer in Economics, University of Colombo and Chinthaka Jayasundara, Lecturer, Department of Economics, University of Colombo .

We regret that such a national strategic approach is not visible in the approach of the policy makers and relevant agencies in pursing discussions on ETCA with India, and on other proposed agreements with Singapore, China and some other countries.