BD, Lanka may sign MoU on FTA today

Bangladesh and Sri Lanka have agreed to start the process of preparatory work during the visit of the Sri Lankan President for signing a free trade agreement (FTA) to tap untapped markets and trades between the two countries.

Diplomatic sources said a memorandum of understanding (MoU) for economic partnership is expected to be signed today (Friday) during bilateral talks to be led by Prime Minister Sheikh Hasina and Sri Lankan President Maithripala Sirisena at the Prime Minister's Office.

The Bangladesh Commerce Minister and the Sri Lankan Foreign Minister are likely to sign the MoU on behalf of their respective sides, they added.

"The MoU on economic partnership will lay the process of preparatory works on the basis of negotiations and a set of parameters for the FTA on an agreed timeframe", said a source.

He said the decision to sign MoU on economic partnership was taken at the last moment following approval by the Sri Lankan cabinet on Wednesday.

The Bangladesh High Commission in Sri Lanka and the Ministry of Foreign Affairs initiated the initiative on FTA though the concerned ministry often shows reservation in signing any FTA with foreign countries.

Many countries including Malaysia, Turkey and India have expressed their interest to sign FTA with Bangladesh from time to time but all these proposals are still at study stage.

Bangladesh and Sri Lanka are both members of the South Asia Free Trade Agreement (SAFTA) but could not make any headway in this regard under the umbrella of the South Asia Association for Regional Cooperation (SAARC).

The signing of the MoU would be the first initiative to start work on FTA with any foreign country by Bangladesh and will help both the countries reduce bilateral sensitive lists and tariff, a diplomat said.

Bangladesh and Sri Lanka feel they have the potential to utilise their large untapped markets assessing Sri Lanka's position in global supply chain and Bangladesh's emerging middle-income status.

Recently the Sri Lankan Commerce Minister said the trade between the two countries stands at US$ 140 million with $ 30 million on the Bangladesh side. However, the state minister for foreign affairs during Wednesday's press conference estimated the trade volume at around $ 80 million.

Diplomatic sources said the possible FTA groundwork will be carried not only on the basis of trade in goods but also trade in investment and services.

Both the countries have already identified some preliminary sectors for cooperation reviewing the synergies, said a source.

The Sri Lankan President arrived in Dhaka on Thursday on a three-day visit with a 73-member delegation paving the way for a new height in bilateral relations.

During the talks, Bangladesh and Sri Lanka are likely to sign a number of deals including MoU in areas of mutual interests which include agriculture, coastal shipping, education, visa exemption for diplomats and officials and standardisation certification.

smunima@yahoo.com