Why Sri Lanka should not sign the Economic and Tecchnology Co-operative Agreement (ETCA) with India

Discussion in 'Subcontinent & Central Asia' started by HeinzGud, Mar 22, 2016.

  1. HeinzGud

    HeinzGud Senior Member Senior Member

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    By C. A. Chandraprema

    The UNP’s rally at Lipton Circus last Tuesday was supposed to be a public show of strength in favour of the proposed ETCA with India. The Prime Minister announced that they would be bringing people onto the streets on 15 March to counter those who had been opposing ETCA and this was the show he promised. The UNP even took the unusual step of having the rally at Lipton Circus without having it at Hyde Park.

    This may have been the first time in the UNP’s history that they took over Lipton Circus which had always been the exclusive preserve of radicals. It was a good show as far as the attendance went though it was certainly not a Nugegoda-like event. We know that the UNP is not a party like the JVP which can get the better part of its membership to turn up for rallies. It also took the form not really of a rally of the UNP proper, but a youth rally against efforts to scuttle ETCA. However we did not see any banners or slogans explicitly promoting ETCA.

    Instead what we saw were slogans demanding that plans for a ‘new Sri Lanka’ should not be blocked by anyone and that no one should oppose the plan to create ‘one million jobs’. The message was far from explicit. We did not hear any of the speakers at the Lipton Circus saying that the ETCA with India would be signed and that this was the way forward for Sri Lanka.

    Instead we heard Minister Akila Viraj Kariyawasam saying that there was a conspiracy to deprive the UNP of its hard won victory and Minister Harin Fernando saying that the Rajapaksas were somehow responsible for the blackouts affecting the country. What is the message they were supposed to convey to the public? Even after that rally nobody is any the wiser about ETCA.


    If the Joint Opposition is opposing ETCA, there are some very cogent reasons to back up that stand. Foremost among the figures in the Joint Opposition opposing ETCA is Prof. G.L.Peiris a one-time minister of export development and international trade in the Rajapaksa government. The stand that he has been advocating is that before signing any pact to take the trade relationship between India and Sri Lanka to a higher level, the outstanding issues in the existing free trade agreement with India should be ironed out.

    Among the issues that stand against Sri Lanka’s inability to derive the due benefit from the FTA with India are issues such as the ports of entry into India assigned for Sri Lankan exports, the non acceptance of product certifications and standards between the two nations, the limits imposed on the importation into India of some of Sri Lanka’s key exports, the licensing arrangements for Indian importers of Sri Lankan goods, and various taxes imposed by Indian states on imported goods all of which have prevented Sri Lanka from achieving its full potential in exports to India.

    After 15 years of the operation of an FTA with India, the total Sri Lankan exports to India stood at 645 million USD in 2015 as against over four billion USD worth of Indian exports to Sri Lanka. Prof. Peiris points out that Sri Lanka is awash with Indian produced vehicles of every description, yet less than 1% of Sri Lankan tea and apparel exports goes to India under the FTA. The rest of Sri Lanka’s exports of tea and apparel goes to the rest of the world on normal trade arrangements – which brings into question the value of the existing FTA with India. After 15 years of operation, our main export to India is arecanut said Peiris, pointing out that we export 67 million USD worth of arecanut to India.

    Adding insult to injury, we exported only 34 million USD worth of apparel to India while importing 94 million worth of apparel related products from India! Exports of tea to India is just 17 million USD. Even though there has been much hype about the expanding middle class in India, Sri Lanka’s main exports have not been reaching that middle class.

    Getting the Indians to open up these sectors is just one part of the problem. Even if Sri Lankan goods are allowed to be exported to India without limit on paper, what actually happens on the ground in India is that there are various non-tariff impediments to exporting goods from Sri Lanka. Many Sri Lankan exporters say that the existing FTA is ‘free’ only for the Indian side not the Sri Lankan side. Prof Peiris says that at the level of bilateral discussions, the Indian side fully recognises the ‘asymmetries’ between Sri Lanka and India and are more than happy to agree that the agreements should be structured in such a way as to be fair by Sri Lanka. However nothing has happened to change things at the ground level.

    Peiris says that that there must be some clarity in what the government intends signing with India. The proposed Economic and Technological Cooperation Agreement ETCA is being negotiated behind everyone’s back while at the same time they are surreptitiously implementing some very critical features of the proposed agreement. At one level they are trying to allay fears among the public and in particular among professionals by saying that nothing has been decided yet and that we are still negotiating a framework agreement and that everyone will be fully consulted. They say that they will be opening up the services sector to India only in two sectors – shipbuilding and IT.

    But they are implementing on the ground agreements in other sectors such as the health sector. Take for instance the proposed Indian ambulance service which has been introduced to Sri Lanka through a cabinet paper and is already in the process of implementation. As far as the opening of the Sri Lankan services sector is concerned, the people are going to be presented with a fait accompli and the actual ETCA agreement will largely be irrelevant – they will be able to do everything they want under cover of the ‘framework’ of the ETCA which they now intend signing.

    In introducing this Indian ambulance service the prime Minister’s cabinet paper on the subject does not explain why there is a need to give an Indian company the right to operate these ambulances instead of giving that opportunity to one of the private companies operating ambulances in Sri Lanka or even setting up a separate unit under Sri Lanka’s own health service. Each Indian ambulance will have a paramedical team and a right to establish health centres for which the Sri Lankan government will provide land and buildings. Furthermore, there is no regulation of the number of health centres that the Indians will be encouraged to establish in Sri Lanka.

    The advertisement that has been published in the local press by this Indian company for ambulance drivers offers Rs. 25,000 per month for drivers for a 12 hour shift. Obviously there are not going to be that many Sri Lankan applicants. If Indians are recruited to these positions, Sri Lankan job opportunities will be taken away. An agreement for the trade in goods is more straightforward than an agreement for the trade in services. By opening up the IT sector you are essentially opening up every sector in which IT is used to a greater or lesser extent. In allowing an Indian ambulance and pre-hospitalisation care service to set up operations in Sri Lanka, you are essentially opening up the Sri Lankan health sector to Indian paramedics, nurses and indeed even doctors as what is going to be offered is a pre-hospitalisation service with medical centres and the like.

    The intimidatory tactics adopted by the Prime Minister to push through this proposal clearly indicates that none of this is really going to be of benefit to Sri Lanka and the government knows it. The Prime Minister says the GMOA does not have any business to get involved in the debate about ETCA and he threatens journalists who write negatively about ETCA. If this proposed economic cooperation pact is really going to benefit Sri Lanka, the government has been extraordinarily unsuccessful in showing the public how this country will benefit from such an arrangement.

    Where the Sri Lankan government failed, the Indian High Commissioner in Sri Lanka stepped in to see whether he could do a better job at a recent workshop for exporters to Sri Lanka. He seemed to suggest that we should be satisfied with our less than 650 million worth of exports of Sri Lanka, and that Prof G.L.Peiris who has been leading the charge on behalf of the Joint Opposition against ETCA should have stuck to law instead of getting into politics.

    None of this has helped the Sri Lankan public to feel that there would be some advantage for Sri Lanka to be derived from this proposed ETCA with India. So long as the outstanding problems in the existing FTA with India remains, there will be no question of being able to convince the Sri Lankan public that the ETCA will be beneficial to Sri Lanka. Hence the most rational course of action would be that suggested by former president Mahinda Rajapaksa – you first iron out the issue of various bureaucratic impediments that prevent Sri Lankan exports from entering the Indian market in the agreed quantitities, and ensure the proper functioning of the FTA to the extent that Sri Lankan stakeholders feel that everything that can practically be exported to India is moving smoothly without any impediments. After operating the FTA in that manner for some years, you then go onto the next step of working out the details of an ETCA with India.http://dbsjeyaraj.com/dbsj/archives/45807
     
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  3. amoy

    amoy Senior Member Senior Member

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    the best known black tea among Chinese is from Ceylon and Assam, and that shall be the same case in other parts of the world too. even an illiterate like me heard of BOP1 FBOP1 FBOP PEKOE OP1 OP FBOPF1 BOP and so on... Lipton does a lot of sales of Ceylon tea in their own packings. therefore obviously Sri Lanka and India are competitors worldwide at least in the tea trade.

    so don't see any benefit of this ETCA for SL at least in regards of TEA.
    [​IMG]
    most popular milk tea of Taiwan + Mainland - branded as Assam Milk Tea ironically. Ceylon tea shall make more promotional campaigns to reverse this disadvantage in PR image.
     
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  4. HeinzGud

    HeinzGud Senior Member Senior Member

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    Ceylon Tea has more weight in Europe, especially in UK. Therefore Sri Lanka markets tea in those regions more vigorously than in Asia.
     
  5. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    Because they do not deserve it.
    You guys are crying about trade balance, you used to get even economic aid from us.
    Just like Nepalis, even if you can't offer something valuable, you still try for equality. Seriously, what's need of doing so? :biggrin2:
    And if you really have too much problem, please do not stick to India, we will also see how much you guys gonna handle alone. :devious:
     
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  6. amoy

    amoy Senior Member Senior Member

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    There're many made-in-India tutus running in SL. A tutu was told to cost 3000usd roughly ~ is it true so expensive? Has the Lankan adminitration ever thought of regulating vehicles as tutu is neither efficicient nor environmentally friendly?Also evidently many second_hand Japanese cars or parts are on sale after refurbishment. It shall be Lanka's opportunity to develop her own auto assembly industry.

    One thing baffling of Lanka politicians may be they allow foreign policy to be swayed by internal politics. Isn't UNP/ Sirisena ascending to power at odds with his predecessor's pro China stratetegy?Their illussion that they are able to aptly balance out goes against ground reality that China is the only top economy growing repaidly in outbound investment. And the closer u get to China the more bargaining power u gain vs. India, re. ETCA or defence etc.. (Yin Yang Philosophy at work).

    Lack of consistency is quite detrimental to SL herself.

    ~Tapa talks: Orange is the new black.~
     
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  7. garg_bharat

    garg_bharat Senior Member Senior Member

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    Interesting thread. What does Sri Lanka want from India?

    And what does it provide in return?

    Same question can be asked of China.

    I doubt it is competition between India and China as to who invests more.
     
  8. garg_bharat

    garg_bharat Senior Member Senior Member

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    Sri Lanka has a limited internal market. Any large industrial facility has to look outside for customers. Who are these customers?

    China can set up factories in Sri Lanka and export products to China itself.
     
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  9. garg_bharat

    garg_bharat Senior Member Senior Member

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    Suzuki is exporting its cars made in india to Japan itself.
     
  10. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    Import Export business buddy. :biggrin2:
    Same things happens to China but Lankan government is little confused.
    They are obsessed with trade deficit with India but has no idea how much Chinese trade deficit will be. :grin:
    More than competition, its just like children play.
    Small countries play game of riding more than one giants at same time :baby:, giants compete how many cutie batoti countries ride them. :devious:



    By the way, where is Sri Lanka? It's very difficult to see such small countries on the map who are demanding for equality. :D
     
  11. amoy

    amoy Senior Member Senior Member

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    China is a maritime power very much dependent on west-east shipping lanes

    Chinese-built port terminal in Colombo converting Sri Lanka into major shipping hub

    COLOMBO International Container Terminals (CICT), built and majority-owned by Hong Kong-listed China Merchant Holdings International (CMHI), is transforming Sri Lanka into a regional shipping hub.

    Ultra-large ships that would earlier bypass Sri Lanka's shallow ports now come calling at the CICT-run "South Terminal" is raking it in for Colombo port like never before, writes the SCMP.

    "See that big cat over there?" points Tissa Wickramasinghe, general manager, commercial and marketing, at CICT. "It takes US$200,000 every day to keep it purring. That's the kind of daily operating cost we are talking about for ships of this size (referring to CMA CGM's 16,020 TEU Marco Polo docked at the terminal). Even an hour's delay means big bucks. That's why they come here, for the reliability of service and the geography."

    The terminal has been a phenomenal success in attracting ships with capacity of more than 10,000 TEU that would otherwise bypass Sri Lanka's shallow ports, Mr Wickramasinghe said.

    "The new facilities make it (Colombo) the only port in the South Asia region with a deepwater terminal that can accommodate the newest breed of 18,000 TEU container ships. Higher efficiency and faster delivery times will attract larger vessels and higher volumes of trade," notes the Asian Development Bank in a recent report.

    Colombo's new-found capacity to handle mega vessels is helping it to take on the transshipment role traditionally performed by ports in Malaysia, Singapore and Dubai.

    With its proximity to the lucrative India market than these hubs, Colombo is fast emerging as the region's port of choice since most of India's own ports lack the depth or the infrastructure to handle big vessels.

    With more than 100 ship calling at the facility each month, the South Terminal handled one million TEU in the first eight months of the year. Throughtput totalled 686,600 TEU in 2014, its first year of operation.

    "That's a huge achievement for any terminal anywhere in the world. The target is 1.3 TEU million this year and 2.4 million TEU in two years, which is the planned capacity of this terminal," says Mr Wickramasinghe.

    Since becoming operational in April last year, CICT helped raise Colombo port's total annual throughput by 14 per cent to 4.9 million TEU. That compares with the port's compound annual growth rate of 1 per cent in the previous four years.

    Colombo has now risen three spots to 30th on the Journal of Commerce's ranking of global container ports. When the terminal hits full capacity, Colombo will zoom into the top 20.

    http://www.worldwide-logistics.cn/EN/news/industry_news.php?f=2015-12-02_180139

    ______
    Chinese are contributing to unleashing SL's potential as a regional hub like Singapore.

    ~Tapa talks: Orange is the new black.~
     
  12. HeinzGud

    HeinzGud Senior Member Senior Member

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    Sri Lanka do not need anything from India. It's your own government that pushes this thing on us.
     
  13. garg_bharat

    garg_bharat Senior Member Senior Member

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    @amoy, in short CICT runs due to business from India, primarily.
     
  14. garg_bharat

    garg_bharat Senior Member Senior Member

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    Why do you think so?? Did Indian government send Sukhoi to bomb Colombo??
     
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  15. Bahamut

    Bahamut Senior Member Senior Member

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    Good ,now do not come begging for economic aid or agreement on fishing in disputed water ,we can also follow the Chinese way on building island .
     
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  16. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    Okay we won't push anymore. :biggrin2:
    And SL will end up crawling like Nepal into UN.
    Do you know how India is trying to push LCA and LCH in SLAF?
    By blocking aid given to Sri Lanka.
    And your government leans to us in many cases for this aid obviously, you guys are also, pulling this aid from us if we are pushing it to you.
     
    Last edited: Mar 23, 2016
  17. amoy

    amoy Senior Member Senior Member

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    Late again aren't u? Britons / Americans have already done so in the Indian Ocean long since.[​IMG]

    Top dogs won't tolerate any bully in IOR. Face the music otherwise!

    Also be constructive. Now -- Can Sri Lanka be the new Singapore? This was the question raised at the inauguration of the two-day Sri Lanka Economic Forum here on Thursday. Calling this analogy interesting, Nobel prize-winning economist Joseph Stiglitz recalled how Singapore was much poorer at the time of its independence, talking about certain advantages that Sri Lanka now possesses in the form of a well-educated and healthy population.

    Referring to the economic growth rates of countries in Asia such as India and China, he said that these were “enviable”, adding that the situation was quite different from the stagnation in Europe and recession in Brazil, Russia and other oil producing countries.

    On the lessons to be learnt from Singapore in terms of economic development, Prof. Stiglitz said it was an example of a “development state,” where the government played a “very major” role in steering the economy. He said if a country achieved more egalitarian growth, it would lead to its better economic performance, resulting in less social strife.
     
  18. garg_bharat

    garg_bharat Senior Member Senior Member

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    Sri Lanka cannot be a Singapore. Why? Because Singapore developed due to its unique location and its small size helped as well.

    India is not getting into the game of competing for influence. If China has change to spare, let it squander.
     
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  19. Superdefender

    Superdefender Regular Member

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    If SriLanka can become Singapore, Pakistan can become another Germany!! So much for logic.
     
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  20. Superdefender

    Superdefender Regular Member

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    If SriLanka can become Singapore, Pakistan can become another Germany!! So much for logic.
     
  21. Indx TechStyle

    Indx TechStyle Perfaarmance Naarmal Senior Member

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    India will look like Canada then I guess.
    :biggrin2:
    :india::canada:
     

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