Trade Trigger

April 4, 2007 (LBO) – A proposed free-trade deal between Nepal and Sri Lanka could boost trade but analysts say there is more potential for service liberalization. Trade between the two countries is slim at the moment at just 371 million rupees in Sri Lankan exports last year and seven million rupees in imports, compared to billions of rupees in trade between Sri Lanka and other South Asian neighbours.

There are also issues of connectivity hampering trade between land-locked Nepal and Sri Lanka.

We are working towards a free trade agreement with Nepal, G L Peiris, Sri Lanka™s export development and international trade minister said Wednesday at a conference on trade in services in South Asia.

Nepal is keen on an agreement, Saman Kelegama, Executive Director of think tank, the Institute of Policy Studies, says, prompting the move to negotiate an FTA.

Though the deal is not expected to be as significant as the India-Sri Lanka and Pakistan-Sri Lanka free trade deals, a Nepal agreement could have other benefits.

There isn™t a large amount of trade at the moment. But the thing with these trade deals is that it may trigger unilater