An expert on international trade, yesterday, stressed the need to analyse the outcomes of the Free Trade Agreement (FTA) with India before opening up new sectors under a fresh agreement.
A former director general of commerce, P.D. Fernando told Daily Mirror that the FTA was a flawed agreement and implemented badly. As a result, he said, the country’s export sector was harmed, due to the removal of concessions that had been granted.
“We should make projections of what exactly we would gain from a new agreement. We must analyse the net results of an FTA like India has done on India-Korea agreement," he said.
He said Trade Total Effect (TTE), Trade Diversion Effect (TDE), and Trade Creation Effect (TDE) as a percentage of TTE, should be calculated.
Commenting on the proposed Economic and Technology Cooperation Agreement (ETCA), he said it would be the first major agreement extending to services, investment, and economic cooperation. He said it would be a step that might discourage other trading partners who had the capacity to open their markets to Sri Lanka through similar agreements.
He noted the need to have proper parameters to access, analyse, evaluate and monitor the services.
“We should negotiate a few parallel trade agreements for comparison and get the best for the country, owing to the experience with the current FTA,” he said.
“The best route for Sri Lanka is to strengthen present FTA and narrow the huge trade gap by facilitating exports. Positive results from this exercise would require and qualify us for a mega agreement,” he said.
In India, Impact Analysis of FTAs has been instituted because it is important to review whether the concessions under these agreements are being gainfully utilised and have resulted in meaningful gains from market access. India also realises the value of simplifying and easing rules of origin criteria to position India effectively in global and regional value chains, he said. (Kelum Bandara)