The Island Online | 16 june 2023
Sri Lanka possibly joining RCEP trade deal: ASEAN
Jakarta. ASEAN recently hinted at the possibility of Sri Lanka joining the world’s largest trade deal, Regional Comprehensive Economic Partnership (RCEP) agreement, which is set to give its signatories including Indonesia even more benefits.ASEAN Secretary-General Kao Kim Hourn on Wednesday met with the Sri Lankan presidential secretariat, led by the president’s senior economic adviser Dr. R.H.S. Samaratunga, in Jakarta.
“They discussed Sri Lanka’s economic reform agenda, including Sri Lanka’s possible interest in acceding to the RCEP in the future,” an ASEAN press statement reads.
The RCEP encompasses the 10 ASEAN member states, Australia, China, Japan, South Korea, and New Zealand. All these countries represent 32 percent of the global gross domestic product (GDP).
The RCEP states that new members can join the trade deal 18 months after it enters into force. Such accession is also subject to the consent of the parties. Original negotiating member India can join the RCEP at any time. In 2019, India decided to drop out of the RCEP talks.
The RCEP is set to eliminate up to 90 percent of the tariffs imposed on the goods traded between its signatories over 20 years of coming into force.
Indonesia officially implemented the RCEP at the beginning of this year. The Philippines became the last of the 15 countries to implement the RCEP. This trade pact only came into force in the Philippines two weeks ago.
Government data showed Indonesia-Sri Lanka trade totaled $433.3 million in 2021, but dropped to $314.2 million a year later. The Trade Ministry reported that Indonesia’s main exports to Sri Lanka in 2021 included coconut (copra) oil, natural rubber, and semi-finished products of iron or nonalloy steel, among others. Indonesia mostly imported knitted or crocheted fabrics from Sri Lanka.
Think tank Lakshman Kadirgamar Institute wrote that ASEAN-Sri Lanka trade reached around $4.5 billion in 2019. Sri Lanka’s exports to ASEAN amounted to $396 million, accounting for 4 percent of what the country exported that year. Sri Lankan imports from the 10-member grouping were much higher at around $4.1 billion.