Comprehensive Economic Partnership Agreement, a welcome move - CCC

The Ceylon Chamber of Commerce believes that Sri Lanka must adjust and respond to significant global trends and practices that will benefit the country.

One such trend is the opportunity presented via the bilateral and multilateral trading arrangements.

The benefits that flow are apparent when one looks at regional trading arrangements such as the European Union (EU) and the Association of South East Asian Nations (ASEAN).

These arrangements are more relevant in the case of our own country in view of the limited market of the country as well as the fact that we are an island nation.

Given the recent economic resurgence of India and the opportunities that market presents, many other developed and developing countries have already commenced negotiations with India for preferential trading.

Some of the key countries and trading blocks that are already in negotiation with India are E.U., ASEAN, Thailand, Korea, Japan, Malaysia, Indonesia, Israel and the Gulf Cooperation Council.

Sri Lanka due to its geographical location and the special relationships that prevail with this neighbouring country is in a unique position to benefit from the Indian economic boom.

We will not be able to successfully compete with India in every product and every service.

We need to find the niches where we have a comparative and a competitive advantage.

Obvious sectors that stands to gain are the tourism, information technology, maritime and aviation services such as passenger and cargo transport, logistics services, ship and aircraft maintenance and repair services.

For example SriLankan airlines have greatly benefited by early entry into the Indian market.

A legally binding document such as the Comprehensive Economic Partnership Agreement (CEPA) will enable Sri Lanka to enhance predictability when entering the Indian market.

In the absence of such an agreement, even if Sri Lankan businesses face difficulties, regulatory barriers and unfair treatment in the Indian market, there will be no forum or no mechanism to address these issues.

The legally binding agreement will give Sri Lanka an avenue to address these issues at meetings between the Government of India and the Government of Sri Lanka to be held every six months.

A negotiated arrangement will also allow Sri Lanka to immediately open out certain sectors whilst on sensitive sector a more phased out arrangements could be arranged.

Sri Lanka in the interests of its rapid economic development needs to address key domestic constraints that hinder our companies from competing with imported products and services.

We need to build our capacity and equip ourselves to be able to utilise the opportunities that arise. The private sector and the Government need to work in partnership to make this a success.

During the negotiation and the implementation of the agreements, there will undoubtedly be obstacles, and it is important that both private sector and the Government work together to resolve these difficulties. While we argue and debate about the need for change, other countries are already making substantial progress.

India has become the centre of attention today in the business world after China. We as a nation need to stand up to the challenge and reap the benefits of India's growth.

The Ceylon Chamber of Commerce therefore welcomes the expansion of the current Free Trade Agreement (FTA) with India to a Comprehensive Economic Partnership Agreement (CEPA) taking the path of a negotiated entry with a phased out programme of extending the coverage of the agreement from trade in goods to trade in services.