Oct 11, Colombo: No less than two thirds of annual imports to Sri Lanka will enter the country duty free when the Free Trade Agreements (FTAs) with China and Singapore are wrapped up, said a visiting top official from World Trade Organization (WTO) in Colombo yesterday.
At present over half of Sri Lanka's imports at 51 percent are from Most Favorite Nations (MFN) sources at zero import duty.
"Assuming both China and Singapore FTAs are successfully formulated, and with zero duty rates, the total volume of duty free imports to Sri Lanka will be 75% of the country's annual imports," Dr. Rohini Acharya, Chief of the Regional Trade Agreements Division of WTO said.
Acharya, joined by the visiting WTO Counsellor Jo-Ann Crawford was addressing the launch event of the National Seminar on WTO and Regional Trade Agreements organized by the Department of Commerce at Taj Hotel, Colombo on Tuesday.
Acharya said the volume of duty free imports annually entering Sri Lanka will go up to 75% from the present 51% bringing significant advantages to the economy such as low cost products in the market and low cost raw materials for export industries. "The two new FTAs can bring an additional 24% totaling it to 75%."
However the WTO official cautioned: "Beware of how you define RTAs - a real RTA (regional trade agreement) should be reciprocal; unilateral agreements such as the GSP are not two-way. We are talking of such two-way (reciprocal) programs as the India-Sri Lanka FTA and Pakistan-Sri Lanka FTA."
Minister of industry and Commerce Rishad Bathiudeen addressing the session said that Sri Lanka was the first South Asian nation to introduce market-based economic reforms.
Secretary of the Ministry of Industry and Commerce KDN Ranjith Ashoka said that it is vital to resolve trade issues but they should not deter in working on RTAs.
"We are presently working towards China and Singapore FTAs. The FTA work is proceeding with much care so that local stakeholders are protected. Sri Lanka's hub positioning is a key. They call it Open Skies, but the open ocean routes are even more important for our trade development. For example, we handle 30% of Indian container trans-shipments."
The two day workshop by the Department of Commerce concludes on Wednesday (11 October). Top officials from the Central Bank, the Treasury, Board of Investment, representatives from five Chambers, and Lankan corporates in exports are participating in the workshop.