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Singapore not aware of changes to FTA with SL

17 Oct 2021

  • Sri Lanka prepares 18 amendments to controversial FTA
  • Govt. assumes Singapore would know via local news reports
BY The Sunday Morning Business Desk Singapore was unaware of the current measures being taken by the Sri Lankan Government with regard to amending the 18 “controversial” clauses in the Sri Lanka-Singapore Free Trade Agreement (FTA), The Sunday Morning Business learns. A reliable source from the Department of Commerce told us that Singapore was not formally informed about the measures taken by the Department to amend the current Sri Lanka-Singapore FTA and the details pertaining to the said “controversial” clauses. “However, they would know we are in discussions about this through newspaper articles,” the source said. A senior official from the Singapore High Commission refused to comment on this matter and asked us to send an email to the Commission. The Sunday Morning Business did not receive a response from the Commission as of Thursday evening (14). Speaking to us, Department of Commerce Acting Director General Ananda Dharmapriyah said the Department was analysing the Sri Lanka-Singapore FTA amendments and looking for appropriate alternative formulations with the involvement of all local stakeholders. “The objective is to remove harmful provisions. However, there is no progress on which to update you in terms of these 18 amendments, as nothing has been finalised to date,” Dharmapriyah said. According to him, Sri Lanka anticipated conducting negotiations with Singapore, which was delayed due to the prevailing Covid-19 situation. Sri Lanka entered into the Sri Lanka-Singapore FTA in January 2018, after 18 months of negotiations amidst local opposition. The opposition was mainly on two grounds: One was that the agreement endangered Sri Lankan jobs by allowing the entrance of Singaporean skilled labour and professionals, and the second was that it would open the floodgates to the importation of clinical and nuclear waste, making Sri Lanka a dumping ground for Singapore. In the face of unrelenting opposition and lobbying, both in the political and professional spheres, former President Maithripala Sirisena a few months later appointed an independent committee comprising five experts to study the FTA and submit a report. During an official visit to Singapore in January 2019, Sirisena, referring to the FTA, said that certain weaknesses of the Sri Lankan side were evident in the drafting of the agreement, and that, therefore, he expected to make amendments to rectify this. In May 2019, Sri Lanka proposed setting up a joint committee with Singapore to amend the FTA, and at that point, the Ministry of Foreign Affairs told us that its provisions were still being reviewed. The Sri Lanka-Singapore FTA liberalises several industries to facilitate trade in services. It provides commitment, transparency, and certainty for Singaporean service suppliers operating in Sri Lanka. Trade in services was negotiated on a “positive list basis”, requiring each state to specify sectors for liberalisation and the corresponding degree of openness. The FTA covers consultancy and advisory services in sectors such as legal advisory for international and third-country law but not for Sri Lankan law, advisory of architectural and engineering services, or management consultancy. Singapore’s commitments are more extensive and liberalise several sectors, including professional services, construction and engineering services, and goods distribution services. Singapore is Sri Lanka’s 20th-largest export destination. Sri Lanka’s main exports to Singapore are mineral fuel and oils, textiles, precious and semi-precious stones, and ships and boats. In contrast, Singapore is also Sri Lanka’s fourth-largest investor, followed by China, Hong Kong, and India. Singapore contributed foreign investment to Sri Lanka to an extent of 5.3% of GDP over 2014-2017.

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