India, Sri Lanka slip on oil, trade deals

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The ETCA (Economic and Technical Cooperation Agreement) faces opposition from political parties as well as some businessmen

The Hindu | 25 April 2017

India, Sri Lanka slip on oil, trade deals

by Suhasini Haidar, Meera Srinivasan

Sri Lankan Prime Minister Ranil Wickremsinghe arrived in New Delhi on Tuesday for official meetings expected to finalise an MoU on developing energy and infrastructure projects in Trincomalee, as well as fast-tracking negotiations for the upgraded Free Trade Agreement —the ETCA (Economic and Technical Cooperation Agreement) — both of which face opposition in Sri Lanka.

Mr. Wickremsinghe, whose visit is also expected to confirm a number of agreements to be announced during Prime Minister Narendra Modi’s visit to Sri Lanka next month, May 12-14, will meet with Mr. Modi, External Affairs Minister Sushma Swaraj, Home Minister Rajnath Singh and Transport Minister Nitin Gadkari.

Trincomalee oil storage

MEA officials said they hoped to see the agreement on the Trinco Oil storage, which was first negotiated in 2003, as well as the development of infrastructure — highways, power plants, a refinery and an SEZ — around the key port town of Trincomalee to be wrapped up during Mr. Wickremsinghe’s talks on Wednesday.

In a last minute hitch on Sunday night, oil union workers in Colombo went on a strike against the planned MoU with India for 84 tanks in the Trincomalee upper oil tank farm, of which Sri Lanka is keen to retain at least 10 for use by the Ceylon Petroleum Corporation. After day long talks with Sri Lanka’s Petroleum Minister Chandima Weerakoddy, and an intervention by Mr. Wickremsinghe, the unions called off the strike that hit fuel supplies in the country on Monday, but claim they have an assurance that their concerns over leasing the tanks to India will be taken into consideration before any announcement is made.

Backing their protest were members of the Joint Opposition (JO) and the leftist JVP, who said the deal would give India control over energy resources in the island nation.

Upgraded FTA

Meanwhile in Delhi, Commerce Ministry officials continued their three-day talks on the ETCA, that began on Monday, to iron out differences on the upgraded Free Trade Agreement of 2000 to include services, investment and technological trade, that has also faced opposition from political parties as well as some businessmen.

“There is widespread opposition to ETCA in Sri Lanka. Professionals are strongly against it, so are businessmen,” said Mr. G.L. Peiris, the leader of the Joint Opposition (JO), who is close to former President Mahinda Rajapaksa.

“The actual working experience of the FTA for the past 17 years is responsible (for the opposition). A variety of means have been resorted to, that make it difficult for Sri Lankans — import licenses, restrictions on ports, times of the year they are allowed to use the ports, certification and quarantine times,” Mr. Peiris told The Hindu in an interview in Delhi. He went on to warn of opposition protests if Prime Minister Wickremsinghe “shut his eyes to the problems.”

Acknowledging the problems, a Commerce Ministry official said India had sent a three member team to visit three or four cities in Sri Lanka recently to make presentations on the benefits of widening the FTA and has formally asked the SL government for a list of perceived “Non-Tariff Barriers (NTBs)” that businessmen were complaining about.

“Every country is hesitant these days to negotiate trade in services. This is an inevitable part and has to be navigated,” the official said, while MEA officials also conceded that the ETCA was far from being concluded at present.

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source: The Hindu