Trade Agreement

September 10, 2014 (LBO) – Sri Lanka and China in talks to finalize 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.

Mutual Recognition of Standards

Lack of mutual recognition of standards between two countries in an FTA is another obstacle exporters encounter, especially exporters of perishable goods. Lack of a Mutual Recognition Agreement (MRA) for standards between Sri Lanka and its FTA partners has resulted in various additional checks/certifications on the goods at the importing country, even though they have been previously tested and certified by the relevant authorities in Sri Lanka. Some of the issues faced by traders include intergovernmental non-acceptance of testing methods and standards; packaging, labeling and markings; and duplication of health and safety checks in India and Sri Lanka. This has resulted in delays and additional costs.

Supply-side Constraints

There is little point in getting concessions under a trade agreement if the country does not have the capacity to supply the goods in demand this can be a constraint in the case of a small country like Sri Lanka.