Financial Daily from THE HINDU group of publications
Saturday, Jun 08, 2002
Industry & Economy
India, Lanka open Nafta-type trade ties
Mr Murasoli Maran, Minister for Commerce and Industry, with Mr Ravi Karunanayake, Minister for Commerce & Consumer Affairs, Sri Lanka, at the first meeting of the Joint Ministerial Committee under the Indo-Sri Lanka Free Trade Agreement in the Capital on Friday.
NEW DELHI, June 7
INDIA and Sri Lanka today moved a step closer towards converting their free trade agreement (FTA) on the pattern of the US-Mexico North Atlantic Free Trade Agreement (Nafta) mode by striving to score greater congruity on issues of common interest.
This emerged at the first meeting of the Joint Ministerial Committee (JMC) under the India-Sri Lanka Free Trade Agreement held here by the Union Minister of Commerce and Industry, Mr Murasoli Maran, and the Sri Lankan Minister of Commerce and Consumer Affairs, Mr Ravi Karunanayake.
Official sources told Business Line here said that discussions at both the Ministerial and official levels point towards "a very strong India-Sri Lanka trade relations in the coming years with both the sides viewing the current scenario of the region positively particularly in the context of peace, harmony and goodwill between the two countries''.
The sources said the emerging trade relationship between the two countries would be on the model of Nafta even as that trading bloc has one more member in Canada, besides the US and Mexico.
In his initial remarks, Mr Maran, while welcoming the delegates from Sri Lanka, lauded the progress made so far in the implementation of the FTA by highlighting its contribution towards enhancing trade and investments between the two countries.
He said the meeting of the Working Group on Customs held on June 5 and the Commerce Secretary level talks held on June 6 were helpful in narrowing differences in some of the pending issues pertaining to the operationalisation of the FTA.
Mr Karunanayake said the meeting assumes much greater significance in view of the fact that it has been organised on the eve of their Prime Minister's visit to India.
He, however, voiced concern over the yawning trade deficit, which Sri Lanka has India with and stated that efforts should be made to bridge this. He also emphasised that much needs to be done by both the sides to further boost bilateral trade and investment flows.
From the Indian side, various issues including allowing import of all types of India tea for home consumption in Sri Lanka and deeper preferential margins for export of bulk cement to Sri Lanka were raised. The Sri Lankan side raised issues about opening up of more ports of export of tea (currently Kochi and Kolkata are the ports designated for import of Sri Lankan tea) and garments under Tariff Rate Quota, deepening of concessions for export of garments and relaxing rules of origin criteria among some other issues relating to giving Sri Lankan products greater access to Indian markets. It was agreed that these issues would be further studied by the sides and finalised in the official level meeting scheduled to be held in July in Colombo.
Both the Ministers agreed that trade in services has become important in the current circumstances and there is need to utilise the core competence of both the countries, especially in the areas of trans-shipment, tourism and professional services to the mutual advantage. It was agreed that a working group can be formed which can examine in greater details as to how services could be included in the FTA.
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