COLOMBO: India will not give a time frame for negotiating an Economic and Technical Coope­ration Agreement (ETCA) with Sri Lanka, visiting Indian Commerce Minister Nirmala Sitharaman said on Tuesday.

She was referring to the controversial agreement that has been opposed by many Sri Lankan professionals because, unlike previous trade agreements, the ETCA covers information technology and shipyard services that facilitate the movement of people for employment.

After holding talks with Sri Lankan Prime Minister Ranil Wickremesinghe and Minister for International Trade and Strategic Development Malik Samarawick­rama, the visiting Indian minister told the media that the ETCA will have to be negotiated in great detail.

India would like the ETCA to be signed, but no timeframe could be specified as yet, she said, emphasising that a trust-building process should be started first. India and Sri Lanka have met only twice so far for bilateral talks on the ETCA.

Given that the main concern about the ETCA is the possibility of cheap Indian labour flooding the Sri Lankan labour market, Sitharaman asked Sri Lankans to consider the factor of inexpensive Indian labour, which will help their entrepreneurs set up manufacturing facilities.

The pact will not be signed without the two parties fully agreeing to it, she said.

Specifically asked about whether the ETCA will lead to the dumping of Indian goods in the Sri Lankan market, Sitharaman said both countries have to abide by World Trade Organisation (WTO) rules with regard to dumping.

The Indian minister also dispelled the impression that the existing India-Sri Lanka Free Trade Agreement (ISLFTA) has worked to the exclusive advantage of India and to the detriment of Sri Lanka.

She said that unlike India’s exports to Sri Lanka, Sri Lanka’s exports to India depend heavily on the ISLFTA. She added that the bulk of India’s exports to Sri Lanka enter the island after paying regular duties.

The Indian minister, however, agreed that non-tariff barriers have been a problem for Sri Lankan exporters. But she stated that these are not exclusive to Sri Lanka and that the same apply to imports from all other counties.

Published in Dawn September 28th, 2016

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