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Cabinet approves Preferential Trade Agreement
Prime Minister of Sri Lanka Mahinda Rajapaksa and PrimeMinister of Bangladesh Sheikh Hasina[/caption] The Sri Lankan Government is discussing the possibility of entering into a Preferential Trade Agreement (PTA) with Bangladesh, with whom it entered into a swap agreement recently, The Morning Business learns. Speaking to The Morning Business, Trade Ministry Secretary Bhadrani Jayawardena stated that with both countries being developing countries in the same region, Sri Lanka looks forward to maintaining good trade relations with Bangladesh. However, she added that nothing has been decided so far, as both countries are still in discussions on this regard. Jayawardena stated: “We have not decided a date of signing (the PTA); we (both countries) have agreed, but it is at the discussion stage,” implying that such a trade agreement would be possible, as the involved countries have expressed each other’s agreement. Cabinet approval was granted to a proposal furnished by the Minister of Trade regarding entering into a PTA with Bangladesh, in order to hold discussions with the relevant authorities of the aforementioned country. Whereas, as the initial step, it was said that the PTA would only focus on a short list of goods. In terms of economic benefits, Jayawardena said “both countries (Sri Lanka and Bangladesh) are trying to achieve development targets. Both countries will have benefits,” indicating that both countries would be able to reap opportunities with regard to the economy. The Ministry Secretary further said that the PTA would focus on sectors such as “apparels, pharmaceuticals, and agriculture”, emphasising that there could be focus on many more other sectors, such as education, in the PTA between Bangladesh and Sri Lanka. She however, noted that she cannot make any assurance in that regard. Nevertheless, prior to entering any agreement, the usual procedure involves conducting a number of discussions with the participation of focal ministries and institutes from both states, Secretary Jayawardena stressed. Both Sri Lanka and Bangladesh act as stakeholder member countries to the accords of the SAARC Preferential Trading Arrangement (SAPTA), South Asian Free Trade Area (SAFTA), Global System of trade Preference (GSTP), and Asia-Pacific Trade Agreement (APTA), as well as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). During the two-day diplomatic tour by Prime Minister Mahinda Rajapaksa in Bangladesh last March, to take part in their 50th Independence anniversary, the leaders of the two aforesaid states agreed upon the requirement of entering into a free trade accord for strengthening economic relationships. Also, due to the fact that trade between the two countries remains at a minimum level despite the special provisions under the mentioned accords, it was said that there was a possibility of entering into a PTA that would benefit the country.