13 July, 2024


Learn From FTA Before Jumping To CEPA

By Sarath Wijesinghe

Sarath Wijesinghe

Sarath Wijesinghe

We are in the learning process through experience. This is our Nation and should take careful and calculated decisions in the interest of our other citizens who are in need of our guidance and it is our duty to impart our hard earned knowledge and experience freely for their benefit and the nation building. Rulers are only temporary caretakers, of the nation and we have a duty to direct them in the correct direction. These matters should be viewed and considered as matters of national interest without narrow political and ideological considerations. FTA and CEPA are the main issues today which are in a confused and uncertain situation. We have not done well in FTA and it is not advisable to get into further trouble by expanding this troubled commercial agreement with the giant South Asian leader and the regional political and economic Giant.

FTA – free trade agreement with India

Free trade agreement with India was signed in 1998 and entered into force in 2000 with hopes of benefiting Sri Lanka and providing fair competition and expand our trade with India. In 2013 total export to India was 543.3 million and the import from India has been 3026 billion. (Source – Department of Commerce Sri Lanka) 21% of our imports are from India and all outside FTA with no concessions. 27% total arrivals are from India and for the time being most are genuine travellers. Free movement will have an influx of Indians coming through the proposed bridge and the tunnel if implemented as reported in Indian media. Majority of the rest of the visitors are from China USSR West including EU. Should there be a free movement from India with 50% without toilet facilities and the economy far below Sri Lanka will have to face enormous issues that the UK is experiencing due to integration with EU. The items to be benefited by FTA and CEPA are Tea, Garments, Vanaspati, Textile, and Oil, Service Sectors and many other items and factors. India is one of our main competitors on tea and the tea production in India is hardly sufficient for the local consumption. They need quality tea to upgrade and re-export to the world. Our tea exported to India will be mostly benefited India due to the enormity of the country and powerful business connections worldwide to value add our items and export to the world, when we are competing with Kenya to be the world leader on Tea. We are experienced leaders of tea though small compared to India. On garments and textiles it is our pride to see Sri Lankan Labels in garments in the world markets worldwide including Marks and Spencer in the United Kingdom. Our pepper and Cinnamon is world class in the world market and the offer by the EU on re introduction of GSP will take our garments to the world market with a new vigour. Ceylon Chambers of Commerce too have commented on Mirror 28/4/15 that integration is good but free trade agreements should be carefully handled especially when dealing with asymmetrical powers. We had unpleasant and bitter experiences with India before. There is no guarantee they are changes and it is their duty to do the best for their country over others.

Ranil IndiaRegional Integration

Regional integration is the process in which neighbouring states enter into agreements in order to upgrade cooperation through institutions and rules. Regional integration is ideal and safe for less powerful small Nations. Integration of Mexico with- North American Trade Association, (NAFTA), USA and the Caribbean integration, have gone through extensive deliberations after careful study unlike the FTA entered into by us hap – hazily which has not been implemented for one year, which is still in embryonic stage. EU integration by Maastricht Treaty has given rice to EU free trade association with distractions effects in terms of economy and integration on free movement. They are facing inter-governmental and worldwide forceful and legal pressure on human smuggling looking for soft targets and implementation of treaty rights on free movement, especially the United Kingdom facing the crisis situation. Best for the SAARC satellites small countries are regional integration as all nations had bitter previous experiences with giant India, especially Sri Lanka during 1987 Indu – Sri Lanka Accord. It is a bitter and unpleasant experience for which Sri Lanka is still suffering on the agreement forced on in the guise of help and a mode of settlement imposed as an accord between two nations. Sri Lanka was not supported by the world powers or any international organisation when she was cornered and appealed for help. Currently there is the issue of illegal fishing and it has come to the state of the survival of the fittest and the law of the jungle in dealing with the invasion of fisherman to the Sri Lankan waters. One can imagine the situation f free movement is allowed by a treaty. We need not be shy or in fear to defend our nation and the rights of the generation to be born.

We should not be anti any country- but be Pro Sri Lankan

Human beings are selfish except those who are spiritually advanced and developed. Nations consist of human beings and are selfish and do the best for their Nations out of the love for the motherland. It is the reality in which every country has their own agenda and it is forcefully applied irrespective of the friendship and neighbourhood. It is necessary that we too need to set up our own agenda in dealing with the neighbours whether small or huge. Therefore it is good and safer for us to be cautious and diplomatic in our dealing that has to be strictly professional. We should not be shy or reluctant to state openly that we have been cheated by Portuguese, Dutch, English and many other countries and international organisations, due to our inefficiency and lack of experience and knowledge on international affairs. Now things have changes and we have battery of international experts to be utilized for the development and prosperity of the Nation. Please this is a generalized statement not aiming at any individual or a government in power now or then. Therefore our political, economic, and diplomatic thinking should be based on theory of Pro Sri Lanka and not Pro West, East, or any power block. Indians say “Buy Indian” and our moto should be “Buy Sri Lankan”.


Indian side proposed a further agreement known as “Comprehensive Economic Partnership Agreement” suggesting proposed CEPA will solve all problems and fill the gaps in the FTA. Will it solve the problems or aggravate is the issue before us to be canvassed and discussed carefully and extensively. Are we strong and competent to meet the powerful regional and world power at an international dispute in an international forum if and when there is a dispute as the Indo Sri Lanka Accord? Who helped us during 1987 crisis- Nobody and no organization helped us and left us alone despite the close and strong links with the Sri Lankan leader H. E. JR Jayewardene and the West? Who is helping us in the Fishermen’s issue haunting our country almost daily? Who is helping us in the disputes on FTA on “Wanaspathie” and other mattes which affects our country and do we have a strong and powerful group to meet the strong and powerful Indian world reputed jurists backed by the entire world backed by the powerful India.

CEPA will liberalise Comprehensive Economic partnership agreement” suggest CEPA will solve all problems in it. How could CEPA solve problems when FTA itself is still in the embryonic stages when how could CEPA w solve the existing issues that are aggravating rapidly? Therefore it is time for us to think carefully after consulting our experts and activists before committing any further on the issue.

In India 50 million are unemployed. Recently Indian media reported that there were three milling applicants in India for a clerical vacancy of 335. Indian population is 1.36 billion as against the Sri Lankan population of 20.3 million in the small Island completed separated from water. She has 780 languages and only three languages Sri Lanka. Labour force in India is 532 million and Sri Lanka 8.5 million 37.5 million are unemployed ( 7%) in India and in Sri Lanka it is only 6.35 (4.1%) These figures indicate the wide and dis propionate differences in the two countries which are not compatible for a free trade agreement on equal terms. Who needs the CEPA? Industrialists, Professional and service sectors have shown the displeasure and objection to the implementation of the agreement. A Barber or a School teacher could enter Sri Lanka with the treaty rights with the employees who will enjoy the rights of any Sri Lankan who in turn will have the right to stay permanently as in the EU which is a recognized and accepted right under international law. An architect whose wife is a lawyer will have the right to join the husband and both will have freedom to practice. They will easily meet the requirement of a graduate as in India there are quality universities as well as plenty of lower level institutions freely offering degrees. This is only a fraction of the danger of free movement and integrations. Biggest mistake we have made was to sell our oil to India giving all lucrative stations and infrastructure. The enormous amounts and the by products are exported to India under FTA, along with broken rice in the form of animal food also using the trade facilities under FTA, benefiting Indian companies. Sri Lankans are not hardworking and enterprising as Japanese, Indian, Chinese, Singoprian or Israialiee to be benefited from the treaty rights and explore India. But Indians will readily explore and exploit Sri Lanka and Sri Lankans. I am sorry to be hard but one should be realistic in arguing a case for her country. Sorry! The proposed Treaty will be not workable and practicable for Sri Lanka and Sri Lankans.

Previous President refused to sign the agreement in 2010, and the Present President too has shown the displeasure. The Prime Minister has agreed in 2002 to improve the FTA to CEPA but the expectation of the community is for his to reconsider the matter considering the new circumstances. Though there is a statement that it will not be implemented soon there is conflicting news in the Indian and world media that the Indian Prime Minister is scheduled to visit Sri Lanka in due course for a comprehensive trade agreement/s between two countries.

India is not the ideal partner politically and economically suited as their GDP is only 2.04 trillion compared to 10.25 of China and 16.77 of USA. Prime Minister has stated that he was surprised to read the proposal to implement CEPA and the proposed Bridge and the Tunnel. But there is information that he has even name it “Hanumantha Bridge”, and the Transport Minister of India Hon Nation Gadkari has plans to visit Sri Lanka with 5 billion ADB loan for implementation. There is a proposal for Economic and Technical cooperation in Oct 2016, and to renegotiate Oil Tanks in Trincomalee in full capacity, Coal Plant in Sampoor, and many other projects. We do not know who to believe.

Proposed Bridge and the Underground Tunnel between Sri Lanka and India

Miraculously Sri Lanka has been an independent Nation from immemorial due to the geographical situation as an Island and implementation of the correct foreign policy by the Kings maintaining close relations with the rulers of India form the time of Kind Asoka who sent the daughter and son to King Devenampiyatissa ( 206 BC-266 BC) of Sri Lanka as emissaries to propagate Buddhism which changed our culture for what it is today. It is dangerous to construct the bridge and a tunnel for free movement which will give rise to distorters’ results in the future. Bridge will make Sri Lanka a part of India gradually and it will be a state/stage that Sri Lankan Government will be in a pathetic situation when Indians implement treaty rights under international law.
Way forward and our future

It is time we be cautious and take all precautions in dealing with regional and bilateral agreements in the interest of the born and unborn to preserve and maintain our inheritance from the fore fathers with great sacrifices over thousands of years and generations. It is our duty to inherit a free country to the next generation. Slightest mistake or oversight will result in irreparable and long term damages sometimes cannot be corrected at all. Best is to avoid such situations and think twice and carefully before taking any decision/s on behalf of the country belongs to the peoples in which the State is only a trustee.

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Latest comments

  • 0

    Dear Mr Wijesinghe (SW)
    I respect your right to wrte and express your ideas. But please don’t write load of rubbish about subjects which you do not seem to know. Indo- Lanka FTA has been in existence for more than 15 years. How it has performed during this period is well documented. Except for the negative list, tariif liberalization programme has now been completed. Some of the problems lie in the Rule of Origin criteria and the non tariff barriers available in India. FTA covers trade in goods only. With all the shortcomings it was a good beginning. It was the first FTA for Sri Lanka and India had ever signed with another country. SW has repeatedly mentioned about Vanaspathi but copper and vanaspathi are things of the past. It is no longer economical for some fly by night Indian investors to invest in vanaspathi in Sri Lanka. Though not fully Both countries have benefitted from this experience. It has given a valuable exposure to the Trade officials also on how to handle future FTAs.
    Both governments appointed an Expert Panel to conduct a study on CEPA and they came out with recommendations on the scope and framework of the proposed CEPA. CEPA was to cover trade in services, investment and other areas of cooperation. Both governments have adopted a cautious approach on CEPA.This is economic diplomacy. Some kind of an enlarged Economic Cooperation Agreement with India is essential given the challenges faced by Sri Lanka these days. PM’s tactical approach to win India is laudable. I am not an admirer of politicians but I can see now economic diplomacy works.
    SW is taking of national interest. He must practise what he says. He must recollect how he behaves not so long ago representing his beloved deposed King’s administration.

  • 0

    free trade agreements are useful for a fair competition, as well as they are used properly. GSP plus was also a similar concession given by EU to Sri Lanka. It was cancelled due to poor governence and violation of human rights. As per the final decision of the appellate body of the WTO, it was said that there was no representation by SRI LANKA for the case. Therefore, any government and the traders have to be watchful because we can not survive the economy without international trade and free trade agreements even though they may have pros and cons.

  • 0

    ” Sri Lankans are not hardworking and enterprising as Japanese, Indian, Chinese, Singoprian or Israialiee to be benefited from the treaty rights and explore India. But Indians will readily explore and exploit Sri Lanka and Sri Lankans.”
    Here is the crux of the matter according to Mr. Wijesinhe himself. So why blame the Indians if the FTA didn’t turn out as expected.

    ” Biggest mistake we have made was to sell our oil to India giving all lucrative stations and infrastructure. The enormous amounts and the by products are exported to India under FTA, along with broken rice in the form of animal food also using the trade facilities under FTA, benefiting Indian companies.”
    Does not Mr. Wijesinghe remember the ramshackle state of CPC filling stations and the surly workforce before LIOC came in and showed them how to run a business?

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