Sri Lankan Commerce Minister Jeyaraj Fernandopullie (second from left) at a meeting on India-Sri Lanka FTA in Chennai on Friday. Others from right are Nirupama Rao, Indian High Commissioner in Sri Lanka, S. Ramanathan, president of SICCI and Shashi Sareen, director, Export Inspection Council. — Photo: Vino John

CHENNAI: The widely accepted norm in international relations that stronger economies must extend a reasonable comfort level to relatively small economies should form the basis for sorting out issues in the India-Sri Lanka Free Trade Agreement.

This was the message that Sri Lankan Minister for Commerce, Trade and Consumer Affairs Jeyaraj Fernandopullie sought to drive home at a conference organised here on Friday by the Southern India Chamber of Commerce and Industry on ``Enlargement of India-Sri Lanka FTA.''

Calling for a confidence building exercise towards enlargement of the FTA, he said in doing so policymakers and stakeholders in the private sector must take note of the ground realities. They must recognise the vast asymmetries prevalent in the two countries.

Referring to the ``widely accepted'' norm, he said many issues relating to implementation of the FTA, however, remained. They were a constraint in the proposed comprehensive economic partnership agreement (CEPA), he said.

Some of the issues were real, while others were ``perceptions or psychological,'' he said, citing the representation made to his Ministry by exporters of various products, including vanaspati. Apart from highlighting the difficulties, they said policy decisions towards imposing quantitative restrictions on exports would jeopardise their investments and affect employment opportunities. Such restrictions would also take away the predictability promised by the FTA to investors and trade.

``At the same time, the quotas granted to Sri Lanka on tea and apparel remain almost unutilised for a number of reasons," said Mr. Fernandopullie.

Nevertheless, the FTA had played a key role in reshaping the bilateral trade and Sri Lanka was firmly committed to its enlargement and for concluding the CEPA expeditiously.

Noting that the two countries reaffirmed their commitment during the visit of Sri Lankan President to India recently, he said technical level negotiations for the CEPA were at an advanced stage.

Negotiations next month

The next round of negotiations is scheduled to be held in Colombo next month. Urging the Indian entrepreneurs to not look at Sri Lanka as a threat, but as a strategic business partner, he said given the size of its economy and industrial capabilities, Sri Lanka was not in a position to cause serious injury to any industrial sector in India.

India's High Commissioner to Sri Lanka Nirupama Rao said the CEPA would further unleash the inherent synergies between the two countries and bilateral investments were expected to witness a quantum jump.

Listing major Indian investments in Sri Lanka, including the proposed foray of National Thermal Power Corporation and Oil and Natural Gas Corporation, she said there were a few areas of concern. One is the pending subsidy of Lanka IOC, which had mounted to $ 74 million.

Subsidy payment

While appreciating the efforts taken by the Government to resolve it, she said the profitability of the company and its proposed investments in Sri Lanka hinged on the subsidy payment.

Shashi Sareen, director, Export Inspection Council under the Union Ministry of Commerce, said the two countries were working on a framework agreement promising to accord mutual acceptance of certificates.

Chamber president S. Ramanathan called for closer working relationship between various governmental organisations.

SAARC chamber president Macky Hashim said Sri Lanka, which also had a FTA with Pakistan, was planning to sign another with Bangladesh.

Printer friendly page  
Send this article to Friends by E-Mail