Hot Potatoes

Mar. 11 (LBO) – Vanaspati, pepper and haggling over negative lists has pushed back trade talks between India and Sri Lanka on liberalising its service sectors, to May. The next round of negotiations under the Comprehensive Economic Partnership Agreement (CEPA) between the two countries was to be held at the end of March.

“There are few nagging issues like exports of vansapati oil to India that we are unable to iron out at the trade level. They have to be taken up at the high or political level before CEPA talks can make headway,” Deputy Director of Commerce, Nimal Karunatilake said.

India is currently Sri Lanka’s third largest export market, with just under two billion dollars in bilateral trade. India is also the island’s fourth largest investor, with investments of over US$ 450 million in the island.

But a surge in duty free exports of sensitive products like Vanaspati and pepper from Sri Lanka to India has Indian demands that it be capped, has both sides riled.

Sri Lankan exports of Vanaspati a vegetable oil – to India have doubled to 200,000 metric tonnes in 2005, from less than 100,000 metric tonnes the year before.

The surge in expor