FTAs with EU, USA and Japan on the cards | Sunday Observer

FTAs with EU, USA and Japan on the cards

20 September, 2020
Sanjaya Mohottala
Sanjaya Mohottala

Sri Lanka has signed Foreign Direct Investment (FDI) agreements to the tune of around USD 1.5 billion this year and investments worth another USD I billion are in the pipeline, Board of Investments of Sri Lanka (BOI) Director General Sanjaya Mohottala told the 40th Annual General Meeting of the Free Trade Zone Manufacturers’ Association (FTZMA) on Wednesday.

He said Sri Lanka has done well so far this year compared to regional countries despite the setback from the global pandemic that dried up investments across the globe. “We are confident there would be more investments coming into the country due to the consistent and clear policies of the new government which has assured that policies will not be changed for the next four to five years,” Mohottala said. Sri Lanka’s FDIs increased by around USD 153 million in the first quarter of 2020. However, according to experts it is unlikely that the country would meet the two billion dollar FDI target this year due to the impact of the global pandemic. The country received FDIs worth around USD370 million early this year which comprised the USD250 million mixed development project by Shangri-La for an apartment and a shopping complex in Colombo. Sri Lanka hopes to sign Free Trade Agreements with the European Union, USA and Japan in the next three years according to the BOI DG.

“We are pushing the move which hopefully will be finalised in the next three to four years,” Mohottala said. Sri Lanka has signed FTAs with India, Pakistan and Singapore, and is negotiating an FTA with China. The FTAs with India and Pakistan cover only trade in goods. The agreements provide for duty-free entry and duty preferences for manufactured and agricultural goods. Domestic value addition of 35 percent is required to qualify for concessions granted under the agreements. The Singapore-Sri Lanka FTA came into force on May 1, 2018, and covers investments and goods. Moves are also under way to issue multiple visa facilities to promote investments. “We are also concerned about greening Free Trade Zones to add another feather to the cap while taking pride on being an ethical sourcing destination,” Mohottala said, adding that steps will be taken to bring about flexibility in labour through reforms aimed at supporting and creating a people and investor-friendly working environment in the country. Mohottala said plans promote pharmaceutical manufacture in line with the government policy and boost export income through apparel exports.

“We are also looking at setting up zones for aquaculture promotion and double the vertical for rubber and ICT,” Mohottala said. FTZMA officials called on the authorities to take cognizance of the need to expedite labour law reforms and regulations to increase production for the local market by 50 percent. - LF