Expectations from Sino-Lanka free trade agreement

June, 27, 2014

Through the proposed China-Sri Lanka free trade agreement Sri Lankan exporters could enjoy more opportunities in the Chinese market, believes Senior Deputy Chairman of the National Chamber of Commerce of Sri Lanka, Tilak Godamanna.

While speaking to he said that discussions are being held over the proposed free trade agreement and that through this agreement Sri Lanka would enjoy the opportunity to export tea, precious stones and jewellery, high value apparels and many more value added products tax free to the world’s largest market China.

Through there is a huge balance in trade in favour of China under the prevailing bi-lateral trade, there is a huge trade deficit on Sri Lanka’s side. There are views that under such a situation, if this free trade agreement is signed Sri Lanka’s trade deficit could increase and this may be a disadvantage to Sri Lanka.

While commenting on this agreement, China’s ambassador in Sri Lanka Wu Jianghao pointed out that China’s attention has been drawn to this fact and that Sri Lanka being a friendly country, China would not sign this agreement to the disadvantage of Sri Lanka.

Under the proposed China-Sri Lanka free trade agreement full tax concessions would be requested for Sri Lankan exports like apparels, coconut, rubber, tea based products, precious stones and jewellery etc, said Deputy Secretary of the Treasury S.R. Attygalle.

The joint Sri Lanka-China assessment report on this free trade agreement has been forwarded to China for approval.

As soon as the assessment report is approved discussions would be held between both countries to sign this free trade agreement, said Atygalle.

“Under this agreement we expect to request a 100 percent tax concession on Sri Lankan exports like rubber, tea, coconut, apparels, precious stones and jewellery etc. Our target is to export around USD 500 million worth of apparels tax free to China.

“We have clearly stated that that Sri Lanka’s professional services would not be opened to China under this agreement. Furthermore, on imports of large machinery and equipment used in the construction sector but not manufactured locally, Sri Lanka expects to provide concessions to China,” Attygalle added further.