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Sri Lanka prepares amendments to FTA with Singapore

11 Jul 2021

  • Commerce Department drafts 18 changes

By Sunday Morning Business Desk  The Department of Commerce along with other related officials are currently working on the 18 amendments that were identified as controversial between the Sri Lanka-Singapore Free Trade Agreement (SLSFTA), The Sunday Morning Business learns. Speaking to us, Department of Commerce Acting Director General Ananda Dharmapriya said that the officials involved are currently studying the amendments and formulating a version suitable for Sri Lanka.  “Right now, we are formulating our own amendments that will be submitted. However, it is taking time due to the prevailing Covid-19 condition as most of the officials are working from home. However, once we submit, the negotiations with Singapore will begin,” Dharmapriya noted.  A 21-member National Negotiation Committee was appointed in April 2021 to overlook the pending FTAs of Sri Lanka. Of these 21 members, 17 members represent the authorities of Sri Lankan institutions, while four members represent the Trade Ministry. 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. 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 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. Bilateral trade in goods between Singapore and Sri Lanka was valued at $ 1.1 billion in 2017. Sri Lankan imports from Singapore were valued at $ 1 billion in 2016, accounting for 5% of all Sri Lankan imports. However, 58% of imports were mineral fuels and petroleum-related commodities, which energy-dependent Sri Lanka would have to import nonetheless. Singapore is Sri Lanka’s fourth largest source of imports.  Singapore is Sri Lanka’s 20th largest export destination. Sri Lankan exports to Singapore were valued at $ 115 million in 2016, or 1% of all Sri Lankan exports. Sri Lanka’s main exports to Singapore are mineral fuel and oils, textiles, precious and semi-precious stones, and ships and boats. SLSFTA 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 SLSFTA 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 fourth largest investor followed by China, Hong Kong, and India. Singapore contributes foreign investment to Sri Lanka to an extent of 5.3% of GDP over 2014-17.


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