Sri Lanka Hopes To Finalise FTA With China In 2017

Trade & Policy

Sri Lanka Hopes To Finalise FTA With China In 2017

Sri Lanka hopes to finalise a Free Trade Agreement with China before the end of this year. Development Strategies and International Trade Minister Malik Samarawickrema said shortly after bilateral talks between Sri Lanka and China in Beijing last week, that he was confident of a free trade pact beneficial to both countries being finalised before December.

The Cabinet of Ministers recently approved a proposal by Samarawickrema to sign an Investment Promotion and Economic and Technical Co-operation agreement with China, under the Memorandum of Understanding that was entered into in April 2016. Prime Minister Ranil Wickremesinghe who led the Sri Lankan delegation at talks with Chinese President Xi Jinping and Premier Li Keqiang said that the government was not looking at individual projects alone, but pursuing its goal of developing Sri Lanka into a logistical and shipping hub as well.

"Our discussions included the Colombo Financial City, the Hambantota Industrial Project and the next steps involved," he said adding that China would honour its commitments. Wickremesinghe said that the Belt and Road Forum (BRF) for International Co-operation which concluded recently in Beijing was no longer about China alone, as every participating country was doing its bit in addition to the World Bank, International Monetary Fund and the Asian Investment and Infrastructure Bank (AIIB). America too sent its representative, he observed. "We are glad to have participated in the BRF, since it would boost development and create jobs. It's a historical first for trade and economic plans of Eurasian countries."

The Prime Minister said that both Japan and China had accepted Sri Lanka as the hub of the Indian ocean considering its strategic location. "Sri Lanka plans to use its strategic location and leverage on our connectivity, to become the hub of the Indian Ocean. History has shown peace and freedom of navigation always resulted in economic growth and prosperity", he added. The Prime Minister said that the BRF initiative of President Xi Jinping complemented Sri Lanka's own initiatives as they shared the same synergies.

Similarly, the success of BRF and Sri Lankan plans would depend on the maintenance of long-term stability in the Indian Ocean by promoting peaceful and non-military cooperation - the five principles of Peaceful Co-existence and ensuring unimpeded commerce based on the multilateral trading system, he emphasised.

The BRF took place amidst concerted attempts by China to get India on board for its Silk Route Project. Sri Lanka's Ambassador to China Karunasena Kodituwakku said that President Jinping had agreed to provide grants totalling Rmb 400 million this year and Rmb 2000 million for 2018 and 2019. In addition, the AIIB would provide concessionary loans, while the Silk Route Fund has also pledged assistance. This was the first time that such commitments had been obtained, he revealed.