Representatives of professional institutions who came down hard on policy makers for rushing through the signing of the Sri Lanka-Singapore Free Trade Agreement (SLSFTA) without consulting the stakeholders, urged the government to present the agreement to Parliament for an open debate and transparency, in a move that concerns the entire country.
Engineers, architects and industry representatives held a media briefing last week to express their displeasure over the manner in which the trade agreement was signed without the participation, consultation and input from the stakeholders who have been voicing their concerns from the time the idea for a FTA with Singapore was mooted.
“We are totally disappointed with the authorities for having kept us in the dark on the nitty gritties of the agreement which is not in favour of Sri Lanka.
The agreement has paid less attention on the benefits for Sri Lanka but has more on the things we need to forego in the process,” Institute of Engineers of Sri Lanka, Vice President Arjuna Manamperi said.
Professionals said that they consider the SLSFTA as a move that puts professional services and sustainable development in the country at stake.
“The FTA with Singapore could have been turned into a major opportunity for Sri Lanka to boost trade and investment. Rather, it is a disadvantage to the country as liberalisation of services will adversely affect professional bodies in the country,” Manamperi said.
Industry representatives felt that their expectations for a comprehensive trade agreement when the groundwork was first laid, was dashed. The SLSFTA is the first FTA which liberalises key services sectors.
“The Schedule of Commitments in the SLSFTA which are of prime importance to the country and professionals when the services trade is being liberalised, was never discussed with professional bodies,” Sri Lanka Institute of Architects (SLIA) President D.H. Wijewardene said, adding that professional bodies have found that there are major concerns for local professionals in the manner in which commitments are written.
“This is where input from experts could have made the agreement beneficial to professionals who have been educated with public money,” he said.
Trade experts said signing of agreements without foresight opens the doors for professionals to leave the country in search of better prospects elsewhere.
The General Agreement on Tariffs and Trade GATT to which Sri Lanka is signatory states that trade agreements must be mutually beneficial to countries that enter into it. Sri Lanka has been a WTO member since 1995 and a member of GATT since 1948.
According to professionals, the SLSFTA has been drafted in a way that does not clearly state what areas are open and what are not for trade.
“In a trade in goods agreement, it is clear what can be brought to a country and what cannot be brought, but when it comes to trade in services it is all about people and livelihood which is much more complex,” the professionals said.
Under the General Agreement on Trade in Services (GATS), services can be traded internationally in four ways, known as the four modes. Mode four refers to the presence of people of one WTO member in the territory of another to provide a service.
Professionals said the gaps in the agreement must be addressed for greater engagement of experts in the formulation of the agreement.
“At the few discussions held between the Ministry of Development Strategies and International Trade and professional bodies, we insisted that until the domestic mechanisms are in place and professional organisations are strengthened to face challenges and ensure the prevention of low quality foreign professionals practicing in Sri Lanka and taking up jobs that need to be held by local professionals, FTAs liberalising the service sector should not be implemented,” IESL President Niranjanie Ratnayake said.
“We are in no way against the signing of FTAs but what we say is it must include the views of professionals and done in a transparent manner that will benefit the country,” she said.
Critics of the SLSFTA say that a company registered in Singapore irrespective of its composition would be permitted to outsource employees from any country to Sri Lanka.
Further they state that the agreement will allow the flow of cheap labour from neighbouring countries having negative implications for Sri Lanka.
The agreement enables Singapore to provide workers from India to work in Sri Lanka when a company of Indian origin makes such a request.
Citizens of Singapore, PR holders or card holders of Singapore can also be employed in Sri Lanka when requested by the investor.
The SLSFTA was signed on January 23 this year after nearly 18 months of negotiations. The agreement includes goods and services, investment, government procurement, e-commerce, intellectual property rights and telecommunication.
Development Strategies and International Trade Ministry sources said the SLSFTA will boost the confidence on Sri Lanka as a country that is open for trade and investment by being a hub for South Asia which is also in keeping with the government’s vision to position the country as an export oriented hub in the region.
Trade between Sri Lanka and Singapore has grown over the years to cross US$ 1 billion.
Sri Lanka was Singapore’s seventh trading partner a couple of years ago with trade in goods to the tune of US$ 1.14 billion accounting for around 4 percent of the country’s total trade.
Sri Lanka’s imports from Singapore includes petroleum, gold, machinery, equipment, chemicals, plastics, iron, paper and malt while exports comprise boats, fuel oil, tea, quartz, gem and jewellery, nuts and rubber tyres.
Singapore is also among the top investors in Sri Lanka, with the presence of its companies in sectors such as property development, tourism, food and beverage processing and telecommunications.