Free Trade

September 03, 2014 (LBO) – Sri Lanka and China in talks to finalise a free-trade agreement which would bring substantial economic and trade benefits to the two countries, with both governments expressing hope that the deal will be implemented at an early date.

Coverage of Goods

For most of China’s FTAs partners, the agreements have eliminated tariffs and allowed preferential market access to China, to a great extent. For example, in its agreements with Chile, Peru and New Zealand, China committed to eliminate duties on 94.6% to 97.2% of the tariff lines, which corresponded to 88 – 99.1% of its bilateral imports from these trading partners. The only exception to this is the China-Pakistan FTA. Tariffs and trade under it have not been liberalized to a substantial level even after its full implementation in 2012; duties on 35.4% tariff lines were eliminated, corresponding to 44.4% of China’s imports from Pakistan. Pakistan too has committed relatively low levels of tariff elimination in the agreement.

China’s Negative Lists

China’s FTAs take into account the sensitiveness of both countries and contain Negative Lists, which exclude a number of products from tariff liberalisation. Except with Singapore, China maintains a n