Sunday Leader, Sri Lanka

Surprised By FTA Request

5 September 2010

Sri Lanka’s request for a free trade agreement (FTA) with Japan came as a surprise, a Japanese official speaking on the grounds of anonymity told The Sunday Leader.

President Mahinda Rajapaksa’s younger brother Basil, who holds the powerful Economic Development Ministry portfolio, together with External Affairs Minister Prof. G.L. Peiris visited Japan recently, and made this request when they met Japanese Foreign Minister Katsuya Okada.
The usual procedure before a request for an FTA is made is that the potentiality of commercial opportunities in that foreign country is made by the business community, after which a feasibility is done. If things are then satisfactory, the next step is to go for an FTA, the whole process of which takes about 2-3 years, the source said.
In this instance nothing of such was done, he said. The source further said Japan’s bilateral trade with Sri Lanka was only 0.03% of its total trade, making Sri Lanka unattractive for an FTA with Japan.
He further said a sensitive sector in Japan was its Agriculture Sector. USA’s demand for Japan to fully liberalise beef imports is yet to get off the ground because of Japan’s powerful farm lobby.
The proposed Korean-Japanese FTA has got stuck because of concerns over the Agriculture sector, however Japan’s first ever FTA, which was with Singapore, saw smooth sailing because Singapore does not have any agriculture exports to threaten the Japanese farmer, the source said.

Start

However, K.J. Weerasinghe, former Ambassador to WTO and EU said that a start somewhere has to be made, before the fructification to an FTA.
“For instance when Sri Lanka lobbied the EU for the removal of its quota system for garments imports, we showed them that entry into the EU market was biased against Sri Lanka when compared to the ‘entry criteria’ for some of our competitor countries,” he said.
For example Bangladesh could enter that market on a duty free basis because of its least development status, so also garments from some countries in the African region.
Therefore after a study, the EU did away with the quota system for garment imports from Sri Lanka, he said.
Weerasinghe further said that the minute size of trade should not preclude a country from entering into FTAs. For instance globally, the value of Sri Lanka’s trade is just 0.06% of total global trade, he said.