Sri Lanka unlikely to sign FTA before deals with China, Korea

Sri Lanka is unlikely to enter into a free-trade area (FTA) agreement with Bangladesh as Colombo is busy negotiating a similar deal with China and Korea, officials said.
The island nation informed Dhaka on several occasions recently about this preoccupation, they added.
The process of signing FTA deal between the two countries remained in its preliminary stages.
However, the heads of government of Bangladesh and Sri Lanka this month at a meeting in Indonesia agreed to move forward with the process fast for striking the trade deal.
Officials in Dhaka said the bilateral trade between Bangladesh and Sri Lanka is worth a mere US$75 million. Thus, both sides show reluctance in striking the deal since it may not help raise the two-way trade by a larger volume.
Trade officials said Sri Lanka has bilateral FTA with some big economies like India and Pakistan. The Indo-Lanka FTA was signed on 28th December 1998 and entered into force on 1st March 2000 while the Pakistan-Lanka FTA came into force on 12th June 2005.
The two free-trade deals have helped Sri Lanka raise its export to some extent.
Officials said China has a large investment in Sri Lanka. China also helped the island nation to build its deep-sea port in Hambantota. Now both the countries are interested to ink the deal soon to reap the benefit. Sri Lanka considers China a potential export destination as its export to the world's second-largest economy is growing at a faster rate.
Trade officials said Dhaka and Colombo's FTA signing is yet to get any shape up till now.
"Bangladesh prepared a template on FTA issue but was yet to exchange it," said one senior trade official.
He said the process remained stalled since Sri Lanka did not show much interest.
   In fiscal year 2015-16 Bangladesh and Sri Lanka had a total trade worth $76 million. Of the volume, Bangladeshi exports accounted for $30.45 million against imports from Sri Lanka worth $45 million.
Another official said bilateral trade between the two countries is very meagre. Thus, both the countries are not enthusiastic about going for FTA.
He said Bangladesh is yet to sign any FTA deal with any country. But it has plans to sign FTA deal with Turkey, Sri Lanka, South Africa, and Myanmar.
The official said Bangladesh wants to move forward towards future deals taking into consideration its graduation to lower-middle-income country.
"So, we are taking necessary preparations so that such bilateral FTAs can help when we lose zero-tariff facilities after graduating to next stage," he said.
Bangladesh mainly exports woven garments, knitwear, home textiles, agro-products, frozen foods, leather and leather goods, footwear, raw jute, jute goods, and bicycle to Sri Lanka.
The major imports from the country include live animals, animal products, vegetable products, animal or vegetable fats and oils, prepared foodstuffs, mineral products, and plastics and rubber articles thereof.
Secretary-in-charge of the ministry of commerce Subhasish Bose could not be reached for a comment despite several attempts.
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