By Madhusha Thavapalakumar
The 12th round of negotiations on the Economic and Technology Co-operation Agreement (ETCA), which was scheduled to be held in September, had been postponed pending Cabinet approval, The Sunday Morning Business learns.
An official from the Ministry of Development Strategies and International Trade (MoDSIT) told The Sunday Morning Business that this was due to a new regulation introduced by the Ministry which states that Cabinet approval is required to conduct negotiations for any trade agreement.
The official noted that this regulation is aimed at ensuring greater transparency and is also applicable to all free trade agreements (FTA) in the negotiation stage.
According to the Ministry, this would be the first time Cabinet approval is sought for ETCA negotiations as the first 11 rounds were carried out without obtaining such approval.
The official from the Ministry told us that in addition to transparency, Cabinet approval has also been necessitated by the long gap of over one year since the last round of negotiations held in October 2018.
The Ministry is now in the process of preparing a cabinet paper which will most likely be submitted to the Cabinet this week, according to the Ministry official.
The negotiations have been on hold for over a year due to a number of unexpected developments in Sri Lanka such as the constitutional crisis in October 2018 and the Easter Sunday attacks. External factors such as the 2019 general elections in India, which was held over seven phases from 11 April to 23 May this year, also contributed to the delay.
On 25 August, The Sunday Morning Business exclusively reported that after a gap of nearly a year, the Sri Lankan Government decided to proceed to the next round of negotiations on ETCA due to interest from Indian authorities.
Accordingly, the 12th round of discussions was scheduled for the first half of September, although the exact date had not been confirmed.
Speaking to The Sunday Morning Business at that point, an official from the Ministry said that the resumption of ETCA negotiations would take place parallel to a feasibility study that would be conducted by Sri Lanka, which was to be based on the proposals and findings produced through the 11 completed rounds of negotiations.
The Sunday Morning Business reliably learns that four proposals were received by the Ministry from several parties interested in conducting the feasibility study through a competitive bidding process. An evaluation committee has now finalised a bidder and the feasibility study will commence after the presidential election.
The feasibility study will be conducted in five phases spanning a maximum of seven months. During the first phase, an inception report has to be prepared within 14 days of signing the contract. Subsequently, the first draft report, second draft report, final draft report, and final report have to be compiled within 120, 150, 180, and 210 days, respectively, after the contract is signed.
President Maithripala Sirisena extending his warm congratulations to Indian Prime Minister Narendra Modi on his victory in the Indian general election at Rashtrapati Bhavan, New Delhi on 30 May
Following the compilation of the final report, the study will be submitted to the Cabinet of Ministers for its information.
In July this year, officials from the Ministry told The Sunday Morning Business that the Sri Lankan Government would not resume the ETCA negotiations until this feasibility study was concluded, as the decision on whether to proceed to the next round would be based on its findings.
However, in August, the Ministry told us that the feasibility study would not have any impact on the negotiations and that its findings will be required and studied only before the signing of the ETCA.
The first round of negotiations on ETCA took place in Colombo in August 2016, and since then, 10 more rounds of negotiations were held in both Colombo and India.
The ETCA faced heavy opposition from professional bodies, particularly in the IT and healthcare sectors, over the past few years on the grounds that Sri Lanka’s skilled labour force would be relegated to a second choice with preference given to Indian workers. However, several economists have pointed out its benefits, which include its potential to address Sri Lanka’s skills shortage.