Aug 15, 2017 (LBO) – Sri Lanka has assured its industrialists that the forthcoming China FTA is designed keeping the local industry concerns in mind.
Comprehensive information sessions on the forthcoming FTA will be held, after Lankan industrialists called for better transparency on the process.
“We will not allow local industries and employment to be hit by any Free Trade Agreements,” said Minister of Industry and Commerce Rishad Bathiudeen at the ministry offices.
Bathiudeen was speaking with industrialists who gathered for a pre-consultation session for the forthcoming Budget conducted by the ministry. Secretary to Ministry of Industry and Commerce Chinthana Lokuhetti and other officials were also present.
Several industrialists voiced concerns that they are in the dark regarding the FTA progress with regard to sectoral coverage of each industry.
“Sri Lanka – China FTA is cross cutting and many local industries could be affected if proper study on impact of domestic industries is not done before agreeing to terms and conditions of the FTA,” said Managing Director of Tantri Motors, Athula Haputantri.
“We came to know that the government may bring down the negative list from proposed 30% to very low 10%. If that happens, many of our domestic industries may close.”
“In addition to lowering the negative list, there also appears to be decision to take off the cesses. Cess in the only protection that the local farmers and industrialists have against heavy import competition and if it’s removed, there can be a crisis for local industries.”
Industrialists from footwear, electrical and electronic products, pharmaceuticals, cosmetics, rubber, wood, automotive components, boat building, processed food and packaging were present at the session.
Representatives from Ceylon Chamber of Commerce, Federation of Chambers of Commerce and Industry of Sri Lanka, Rubber Associations and Food Processors Associations also joined the session.
According to the Department of Commerce, during the period 2012 to 2016, Chinese imports to Sri Lanka have surged by 67%, from $2.56 billion in 2012. Chinese imports increased by 15% to US $4.27 Bn in 2016.
In 2016 Sri Lanka’s total bilateral trade with China was $4.4 billion, a 363% increase in comparison with $965 million a decade back.
Among leading imports from China to Sri Lanka in 2016 were mobile phones, light-vessels and dredgers, semi-finished iron / non-alloy steel products, automatic data processing machines, fertilizers, projectors, and net fabrics.
“We also request the government to have only one window-BoI- for incoming FDI rather than multiple doors. We do not know even the new BoI industry investments and we know only after the BoI project starts that there is foreign competition for us,” Haputantri said.
Tantri motors is a leading producer of tractor-trailers, tankers (including cement), construction plants & equipment, storage tanks, silos, overhead & gantry cranes and is also involved in exports of them.
Other industrialists agreed with Haputantri’s opinion.
“We as Lankan industrialists, want to know which Lankan industry sectors would be opened for China FTA and what duty reductions would be given for imports,” said Executive Director of Global Rubber Industries Ananda Caldera.
Bathiudeen assured them that his Ministry, with the Cabinet Committee on Economic Management (CECM) will consult all relevant industries before inking the pact.
“I am immediately directing my officials to conduct a rapid industry assessment of all the industries that want some assurance on the China FTA. I want my officials to produce the assessment results in two weeks. We will also hold comprehensive informational sessions on the forthcoming China FTA for our industrialists so that they are prepared,” Bathiudeen said.
“I shall also speak with the Department of Commerce regarding import cess and China FTA and will immediately forward your concerns to Prime Minister Ranil Wickremesinghe’s Cabinet Committee on Economic Management (CECM).”