Business

No ETCA talks this year: Feasibility study to drag on to 2019

 
By Madhusha Thavapalakumar

The Sri Lankan Government is set to commence a long drawn-out feasibility study on the Economic and Technology Co-operation Agreement (ETCA), which will rule out any possibility of carrying out negotiations this year.

The Sunday Morning Business learnt that the Ministry of Development Strategies and International Trade (MoDSIT) called for tenders from 3-24 June to conduct a feasibility study on the proposals and findings that have been produced through eleven rounds of ETCA negotiations.

According to the Ministry, the feasibility study will be conducted in five phases, spanning a maximum of seven months.

Due to the opposition ETCA faced from professional bodies over the past few years, it is seen as a politically risky agreement which is best left untouched heading into elections. Therefore, any further progress on it is likely to be deferred till the end of the looming election cycle.

It should be highlighted that following the eleventh and the latest round of ETCA negotiations in October 2018, the Ministry forwarded proposals and findings of all 11 negotiations to the Department of Commerce to compile a feasibility report, and the report was to be submitted to the Cabinet of Ministers by mid-March this year.

However, due to unknown reasons, Department of Commerce’s feasibility study report reached neither the Ministry nor the Cabinet of Ministers even in mid-May, and the Ministry called tender proposals to conduct feasibility studies on all pending Free Trade Agreements (FTAs) including ETCA.

Now, an Evaluation Committee headed by the Ministry’s Additional Secretary of Development W.A.D.S. Gunasinghe is in the process of evaluating received proposals from bidders, and a competitive bidder will be selected and awarded the tender this week.

The awarded bidder has to sign an agreement with the Ministry of Development Strategies and International Trade before commencing the study.

The study will focus on providing analysis on the extent to which the proposed agreement is in line with the national policies and interests. In addition to this, attention will also be paid towards identification of the service sectors which can be liberalised under the proposed agreement, recognition of a modality for Investment Chapter and macro level analysis on the impact of proposed agreement.

During the first phase, an inception report has to be prepared within 14 days after contract signing. Subsequently, the first draft report, second draft report, final draft report, and final report have to be compiled respectively within 120 days, 150 days, 180 days, and 210 days after contract signing.

Following the compilation of the final report, the study will be submitted to the Cabinet of Ministers for their information. Based on the report, the Ministry will decide whether to resume to the next round of negotiations or to make further amendments to what has been negotiated thus far.

According to the Ministry, the date for succeeding rounds of negotiations has to be decided by the Director General of the Department of Commerce.

The Sunday Morning Business contacted the Department of Commerce in this regard where they refused to confirm a date for next round of negotiations as it is a collective decision that has to be taken with the Indian counterpart.

Speaking to The Sunday Morning Business in May this year, Ministry Secretary S.T. Kodikara noted that anyways, ETCA would be further delayed due to the Easter incidents in Sri Lanka as well as India’s general elections.
India’s general elections were held in seven phases from 11 April to 19 May 2019 to constitute the 17th “Lok Sabha”. The counting of votes concluded on 23 May, and on the same day, India’s Prime Minister Narendra Modi was re-elected.

Two weeks after a landslide victory, Modi visited Sri Lanka on a request extended by Sri Lankan President Maithripala Sirisena, but sources disclosed ETCA was not a topic in their discussions.

Photo Lalith Perera