Lanka keen on partnership to stimulate trade
Wednesday, 16 April 2003, 19:30 IST
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NEW DELHI: India and Sri Lanka are working on a proposal from Colombo to broaden their bilateral free trade agreement (FTA) into a partnership pact that would lower barriers and stimulate economic activity between them. "An ISLEPA (Indo-Sri Lanka Economic Partnership Agreement) would provide a basis for the two countries to move forward in a much broader range of economic areas than would be typically addressed in a free trade agreement," says a concept paper prepared by Sri Lanka. "The primary goal of ISLEPA would be to reduce the policy and regulatory barriers and distortions that limit economic activity between the two countries. The barriers stand in the way of competing more effectively in the global economy," it says. It would also aim at maximising the benefits for both countries through greater economic integration and wider cooperation, the paper adds. Prime Minister Ranil Wickremesinghe, who is keen to integrate the economy of the two countries, is the spirit behind the concept, according to Sri Lankan High Commissioner to India Mangala Moonesinghe. "What he envisages goes beyond the routine FTAs. The partnership proposals could even lead to employment of each other's nationals," Mooneshinghe told IANS. He said Indian Prime Minister Atal Bihari Vajpayee was impressed by the concept paper and had said the two countries should work together to make it a reality. Moonesinghe said his prime minister was also keen to see commencement of work on a bridge linking the island with India across the narrow sea channel that separates them. This will help in economic and cultural integration, he said. Arguing the case for the partnership agreement, the concept paper notes: "Both countries are emerging as competitive international suppliers of services in a number of areas. It is in the economic interest of both countries to remove or reduce barriers to the trade in services generally and between countries in particular. "It is proposed that with few areas excluded, trade in services between India and Sri Lanka be further liberalised under the proposed ISLEPA. This would ensure that service providers from both countries would be granted national treatment and that the most favoured nation principles be maintained." It said the agreement should cover services relating to business, communication, construction, distribution, environment, finance and transport - marine, air and land - tourism and travel and recreation, culture and sports. It notes that both countries are actively taking steps to improve the environment for foreign and domestic investment. "There is scope for mutual benefit if these reforms are undertaken in ways that are consistent and complementary - thus making it more attractive for bilateral and third country investment to consider joint ventures in both markets," it says. "The goal of the ISLEPA should be to provide national treatment for investors from the partner country and to provide greater protection for investors through strengthened rules on transfers of investment and related payments, dispute settlement and increased transparency."
Source: IANS
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