{"id":108064,"date":"2020-10-26T16:46:29","date_gmt":"2020-10-26T23:46:29","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=108064"},"modified":"2020-10-26T16:46:29","modified_gmt":"2020-10-26T23:46:29","slug":"the-pohottuwa-government-of-sri-lanka-part-2-a-4","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2020\/10\/26\/the-pohottuwa-government-of-sri-lanka-part-2-a-4\/","title":{"rendered":"THE POHOTTUWA GOVERNMENT OF SRI LANKA Part 2 A 4"},"content":{"rendered":"

KAMALIKA PIERIS<\/em><\/span><\/h2>\n\n\n

India and Sri Lanka signed an FTA in 1998,  it was\ndone very fast. Discussion started in August 1998and the FTA signed in November 1998 with just 4 consultations. The\nFTA became effective in 2000, but only the criteria were laid down not the\nprocedures, observed critics.  <\/p>\n\n\n\n

A Joint Study Group (JSG) was set up in April, 2003 to expand the\nFTA to go beyond goods and include services. The JSG report was ready in\nOctober, 2003 CEPA negotiations were started in February, 2005 and concluded in\nJuly 2008 after thirteen rounds of negotiations. CEPA was to be signed at the\nSAARC Summit of 2008 but due to reservations expressed by Sri Lanka, it was\nnot. <\/p>\n\n\n\n

India did not give up India said\nthat CEPA can resolve the problems created by the\nFTA.Federation of Chambers of Commerce of India handed over the agreement at\nthe IIFA Business Forum, 2010. Once again Sri Lanka raised objections and the\nPresident did not sign it. A copy had come to a few Sri Lankans secretly, and they\ntook action to prevent the agreement. The document has not been made public\nthey complained.<\/p>\n\n\n\n

When the government changed in 2015 and Yahapalana\ncame in, the agreement was brought out again, this time with the name changed from\nCEPA to ETCA (Economic and Technical Cooperation Agreement). Yahapalana was\ndetermined to proceed with this Agreement. \nThe trade sector in Sri Lanka protested strongly against this.<\/p>\n\n\n\n

Sri Lanka\u2018s industrial sector, and the Chambers of\nCommerce said that the FTA of 2000 had not benefited Sri Lanka, although many\npeople are talking about the entry into the vast Indian market. Our businesses find it hard to compete in\nIndia since our cost of production and domestic price are higher. When we\nanalyze the     FTA with India for\n2003-2009, we find that India exports to Sri Lanka are up and ours are down. <\/p>\n\n\n\n

After 10 years of FTA Sri Lanka exports to India\nhave declined  from USD 515 million  2007 to USD 324 million  in 2009 last year, they said.    India has also not benefited by the FTA due\nto the checks and balances impose by the Sri Lanka side otherwise by now the\nlocal market would have been flooded with cheap Indian good.<\/p>\n\n\n\n

India had granted concession to Sri Lanka for 4000\nproducts, of which   Sri Lanka produces\nvery few. New industries are not nurtured, spec icily in the agriculture\nsector, to make use of these export concessions and we continue to struggle\nwith poor infrastructure, high-energy costs and a shortage of labor which\nundermines our competitiveness, the trade sector said.  They did not ask why sign a trade agreement\nfor goods Sri Lanka does not produce.<\/p>\n\n\n\n

Industrialists complained loudly that India harasses the Sri\nLanka exporter. There is no end to the long list of non-tariff barriers that\nconfront these goods. Indian exporters do not face any non tariff barriers when\nexporting to Sri Lanka. <\/p>\n\n\n\n

Sri Lanka exports face numerous non-tariff\nbarriers,   tariff rate quantities, port\nrestrictions, customs delays and cumbersome laboratory tests. Tests are asked\nfor even when the goods are accompanied by certificates. The checking of edible items is done by labs\nsituated far away. Imports into Chennai are sent to CFTRI Mysore, and imports\ninto Mumbai are sent to CFTRI Pune.<\/p>\n\n\n\n

Documents not specified in the FTA are asked\nfor.  Documents in accordance with the\nFTA are rejected by the Indian officials who say that they are not the proper\ndocuments and ask for additional documents. Often customs even demand a\ndetailed cost sheets which reflect the value added criteria and there are\ndisputes when these are produced.<\/p>\n\n\n\n

The classification of goods is also a problem. While\nsome goods appear on the Open General License when the good arrive in India,\nthe importer is told that Special Import License is required. The SIL for any\nnon vegetarian food stuff, for instance has to be issued by the Indian subject\nministry, which is in faraway Delhi. <\/p>\n\n\n\n

Different ports in India classify the goods imported\nunder different duties. At time customs declare that although for certain good\nwhere there is  Basic Customs Duty but\nCounter Vailing Duty is applicable. The importer [means the exporter] due to\ntime and cost pays this amount under protest.<\/p>\n\n\n\n

The rule of origin criteria are too stringent and\ncan block Sri Lanka exports. The Certificate of origin from Sri Lanka can be\nused only after the shipment has left. \nWhen goods arrive, prior to the documents, without the essential COO\nwhich has to be certified by the local Sri Lanka High commission there is a\ndelay as goods cannot be cleared without this vital document. Delay as every\npoint result in demurrage and other costs be incurred which are prohibitive\nwhich in turn make the import unviable.<\/p>\n\n\n\n

In addition to central government taxes, sometimes\nthe particular state also has special taxes for some of the items, e.g. Kerala\nis taxing the tea packaging and the tea tags too. The import of quality Sri\nLanka teas, particularly flavored teas has encountered a significant number of\nproblems in India. The Tea board in India has to approve the imports, which is\ntime consuming as there are no procedures laid down.<\/p>\n\n\n\n

The business sector in Sri Lanka objected strongly\nto CEPA.  India has asked Sri Lanka to\nsign the agreement first and see to the details after. The schedules will come\nlater. Critics said No. It is India that is pressing for this. if we sign the\nagreement cannot be reversed. It is a bilateral agreement so there is no court\nto which we can go. If we change terms heavy penalties have to be paid.  The danger is in the annexures said critics.<\/p>\n\n\n\n

Our exports go elsewhere not to India, the business\nindustry said. India is not a big market for us, elsewhere is better. We must sign CEPA only after we ensure that\nit will be in our interests to do so. we must not sign CEPA in a hurry. CEPA\nmust be reviewed by all ministries including defense because there is a\nnational threat involved. <\/p>\n\n\n\n

We must first address all the key issues, that are\nhindering our exports, include the schedules and bring in conditions preventing\nadditions of any schedules outside the discussed areas. we must avoid signing\nan open-ended framework agreement, have sufficient domestic legislation, and\nhave a patriotic committed result orients and hard working team that should\nmatch if not better the Indian team. <\/p>\n\n\n\n

The Indo Sri Lanka frame work agreement (CEPA\/ECTA) has many\nirreversible loopholes that will trap Sri Lanka into a helpless situation. The\nclauses are vague and open ended, such as \u2018shall include but shall not be\nlimited to\u2019. Also it says all subsequent agreement shall form part of ECTA.\nonce ECTA is signed any annexes added later will have the same legal binding as\nthe signed ECTA. If we default we have to pay compensation. BOI allows foreign investment which is unilateral and\nrevocable, so why CEPA? <\/p>\n\n\n\n

 Why is India so keen when our market is small?\nIndia does not need CEPA.  They have\nalready established industries and Indian business houses and their businesses\nthrive in Sri Lanka. Is there an underlying motive behind CEPA?<\/p>\n\n\n\n

 Yes, there is, said critics. It is to get\ncontrol of the country. Sri Lanka is strategically important.  India can\u2019t control Sri Lanka militarily, so\nIndia plans to do so  through other\nmeans, by getting control of Sri Lanka\u2018s goods and services.<\/p>\n\n\n\n

CEPA\nis inimical to our interests. The ground realties are not conducive to signing\nCEPA.  There is strong possibility of\nIndian dominance of our home grown industries, taking control of companies\nmanipulating the stock exchange, said critics. <\/p>\n\n\n\n

The persons urging CEPA appear to be non-business\nmen, such as economists, who do not have businesses to export to India, but are\nurging business men on to it.  Those\nsupporting India said that CEAT and Nicholas Piramal have taken over sick units\nand turned them around. Also Lanka IOC is a notable achievement, entering in\n2002, and revolutionizing the petroleum sector. They have plans for further expansion.\nAlso Bharati Airtel has led to a drastic reduction in mobile call rates.  Ceylon Biscuits, Brandix, John Keells, Hayleys,\nand Aitken Spence hotels have done well, these ECTA supporters said.<\/p>\n\n\n\n

 Pathfinder Foundation\nsaid that there were provisions in the agreements for safeguards.  And we have the trade negotiators to handle\nthis. <\/p>\n\n\n\n

Business people were less enthusiastic. Indians can\ncome and start state trading organizations here. They can repatriate profits abroad. if they start industries here, it will kill\nthe local ones by undercutting for a few years, then they will start to\nincrease prices. Sri Lanka companies will also then have to raise their prices,\nso no benefit to us. <\/p>\n\n\n\n

The factories in India are huge, the scale of\noperations is gigantic, they have the raw materials. Sri Lanka can only boast\nof a few FMCG (Fast Moving Consumer Goods) industries what are somewhat large\nand may the only ones that will survive the CEPA as a niche market.   India\nis not a level playing field, and the local manufacturers will get hurt.  India can enter with low prices, sustain long\nprice wars, smother competition without feeling it. No foreign exchange will\ncome in, it will only go out. <\/p>\n\n\n\n

  Furious business men pointed out that ECTA\ngives India access to all goods and services in Sri Lanka except the following.\nSri Lanka was given exclusive rights to pawn broking, money lending, small time\nretails trade, personal services, coastal fishing ,  not deep sea fishing.   There would be 50% Indian ownership of 25\ncinemas. there can be 10 halls inside each cinema.40% cinema time would be for\nTamil and Hindi only. Film makers when alerted objected. Our culture will also\nbe affected critics complained. <\/p>\n\n\n\n

If CEPA goes thoughSri Lanka will be swamped by Indian labor in all spheres of work,\nprofession, skilled semi skilled, due to the heavy unemployment in India. All\nseven copper industries operated in Sri Lanka by Indians had unskilled laborers\nas their managers. CEPA says India can bring down all technical staff from India.\nAny Indian can bring his family and they can work anywhere they want.\nDependants are not defined. So the family alone can take up about 5 jobs. <\/p>\n\n\n\n

The FTA was for trade in goods only, but CEPA\nincluded services, investment, and movement of people.  if we open up the service sector without\nregulation our county will be swallowed up by the mighty India companies, said\nBandula Perera.<\/p>\n\n\n\n

Services\nwill include the movement of persons. This comes under Mode 4 of the General Agreement on\nTrade in Services (GATS) of the World Trade Organization. Mode 4   is on \u2018the presence of natural persons \u2018in\nthe receiving country.  This is a tricky,\ndangerous issue.  Officials of the   Ministry of Trade said   that they are careful never to agree to\nanything in Mode 4, \u2018because once we agree we cannot get out of it\u2019. India has\ncarefully defined and limited the scope of movement of natural persons. They\ncan stay only for a maximum period of 15 months. Sri Lanka does not have the\nnecessary controls in place. <\/p>\n\n\n\n

 Mode 4 could also be used to send   Indian professionals to Sri Lanka. Professionals in Sri Lanka were concerned. Sri\nLanka does not have a regulatory system for monitoring professionals. There are\nno legally authorized bodies.  The few we\ndo have are weak. \nIndian professionals will walk in. This is unwise. Indian professional\nstandards are different to ours.    <\/p>\n\n\n\n

In\nthe case of engineering, Sri Lanka engineers observed that. India\u2019s degree for\nengineering is only three years, ours is four years. also, there are many\nunemployed engineers in India who will flood this country. <\/p>\n\n\n\n

Sri Lanka doctors strenuously object to India\nentering the health sector. They do not think highly of India\u2019s health service\nor medical education. They say Sri Lanka\u2019s  \nmedical training is superior. it is uniform and invariably excellent. In\nsome of the best research hospitals of the world, a Sri Lanka specialist can be\nfound. Sri Lankans go abroad for treatment because those hospitals have\nsuperior technology, not superior doctors. The answer therefore is not to\nimport Indian doctors here, but to get down modern technology.<\/p>\n\n\n\n

Sri Lanka could be proud of its health achievements,\nlow maternal mortality, high life expectancy, successful elimination of malaria\nand free availability of healthcare to all citizens. All this has been achieved\nat the mere cost of only 1% of National GDP due to the skill and dedication of\nour health care professionals, said the doctors.<\/p>\n\n\n\n

Sri\nLanka Medical Association said India was asking Sri Lanka to recognize the\nqualifications of Indian doctors. They also said that 25 to 30 categories of\nparamedical professional were to be included in the CEPA.  also CEPA   would \nhelp by pass a number of health laws including those associated with\nquality control (CDDA no 27 of 1980)and the monitoring of the private health\nsector ( PMIR no 21 of 2006).  <\/p>\n\n\n\n

They\nalso complain that Sri Lanka eradicated polio years ago but cannot get a\ncertificate because neighboring Tamilnadu had frequent polio epidemics. They\npoint out that the substandard pharmaceuticals coming into Sri Lanka are all of\nIndian origin. Tablet manufacture is a cottage industry in India. (continued)<\/p>\n","protected":false},"excerpt":{"rendered":"

KAMALIKA PIERIS India and Sri Lanka signed an FTA in 1998,  it was done very fast. Discussion started in August 1998and the FTA signed in November 1998 with just 4 consultations. The FTA became effective in 2000, but only the criteria were laid down not the procedures, observed critics.  A Joint Study Group (JSG) was […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[104],"tags":[],"class_list":["post-108064","post","type-post","status-publish","format-standard","hentry","category-kamalika-pieris"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/108064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=108064"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/108064\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=108064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=108064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=108064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}