Sri Lanka-Bangladesh FTA resurfaces with Commerce Minister’s visit

The init ial discussions on the possibility of a Sri Lanka-Bangladesh free trade agreement (FTA) are likely to take place between the Sri Lankan government and Bangladeshi Commerce Minister currently visiting Sri Lanka. “Honourable Minister is in town. There’s a proposition of having a bilateral FTA,” Bangladeshi High Commissioner in Sri Lanka Riaz Hamidullah told a bilateral trade and investment forum organised by his High Commission in Colombo and the National Chamber of Commerce of Sri Lanka, on Monday. He noted that Bangladesh’s Commerce Minister Tofail Ahmed would be meeting Development Strategies and International Trade Minister Malik Samarawickrama and Finance Minister Ravi Karunanayake s e v e r a l t i m e s t h r o u g h o u t h i s visit here.

He added that the discussions would include the impacts of a possible FTA on the economies of both the countries, the model to be used in entering such a trade deal and what modes of trade will be opened through it. “We are seeing not only a movement in the FTA but also in other agreements on investment protection and MoUs (Memoranda of Understanding),” Hamidullah further added. He went on to say that Bangladesh is looking for Sri Lankan investments in tourism, apparel, education, IT and fishing. The Bangladeshi High Commission had first publicly revealed its keenness to have an FTA with Sri Lanka this August and Development Strategies and International Trade State Minister Sujeewa Senasinghe had later said that the Sri Lankan government is also interested in the possibility. Sri Lanka’s leading exports are apparel, tea, rubber and IT services and Bangladesh also exports apparel, being the second largest apparel manufacturer in Asia after China, as well as agricultural products. Sri Lanka’s bilateral trade with Bangladesh is around US $ 150 million, in favour of Sri Lanka. Many Sri Lankan companies are major investors in retail goods, energy and apparel sectors in Bangladesh. However, Sri Lanka’s total exports to the world amounted to just US $ 11 billion in 2015, compared to US $ 34 billion export earnings recorded by Bangladesh. Bangladeshi traders present at the forum noted that traditionally, exporters in South Asia were directed to trade with the Western world but that they should look at trading with regional markets in the future. Bangladeshi companies have recently expressed interest in listing on the Colombo Stock Exchange as well, showing the push made by the South Asian country with a population over 150 million, for regional integration. The Sri Lankan government is hoping to transform the island into South Asia’s logistics and financial hub. Sri Lanka is currently negotiating trade agreements with India, Singapore and China, while several more are being conceived.