Sri Lanka, Bangladesh agree to finalise FTA

President Maithripala Sirisena with Bangladesh Prime Minister Sheik Hasina during their meeting in Dhaka
  • MoU on economic partnership inked during President Sirisena’s successful visit to Dhaka

  • 14 agreements signed to bolster greater bilateral cooperation 

President Maithripala Sirisena with Bangladesh Prime Minister Sheik Hasina during their meeting in Dhaka
Sri Lanka and Bangladesh have agreed to finalise a Free Trade Agreement between them by the end of this year.

The matter came up for discussion during bilateral discussions when President Maithripala Sirisena visited Dhaka last week.

As the first step, a Memorandum of Understanding on Economic Partnership was signed between the two countries. The MoU “should pave way for the conclusion of the Free Trade Agreement (FTA) by end-2017,” said the joint statement following the conclusion of President Sirisena’s visit.

The two countries also signed 14 bilateral agreements during the visit covering areas such as trade and investment, agriculture, information and communication technology, higher education, finance and overall people-to-people connectivity.

Bilateral trade between Bangladesh and Sri Lanka is $ 142 million and during an investment forum attended by President Sirisena in Dhaka, attention was drawn to make it a threefold rise within the next few years.

In order to reap the benefits of wider economic partnership, the two leaders directed the authorities concerned toward the early finalisation of the agreements on customs cooperation, the avoidance of double taxation and the promotion and protection of investment between both nations.

Taking into account the advantages, opportunities and complementarities that Bangladesh and Sri Lanka enjoy, the leaders recognised the potential for collaborative partnership between the private sectors of the two countries, particularly in high-end apparel and textiles, information technology and the related knowledge industry, religious and ecotourism, gems and jewellery and precious metal, agriculture and agro-processing, fisheries, livestock, dairy, horticulture, health management, infrastructure development and construction, pharmaceuticals, energy and power. 

They highlighted that investments from both countries could profit through increased joint ventures and public-private partnerships. They encouraged sectoral industries, industry associations, chambers, etc. of the two countries engaging in greater dialogue towards beneficial and result-oriented collaboration, including investment.

Acknowledging that trade between the two countries was far below its potential, the two leaders agreed that in the case of economically meaningful exportable items, the tariff should be further lowered and non-tariff barriers addressed expeditiously. Noting the potential of mutually beneficial collaboration in the pharmaceutical sector, Bangladesh requested Sri Lanka to simplify the registration process for Bangladeshi pharmaceuticals at the earliest.

Both sides further agreed to engage in facilitating mutually beneficial investments in respective special economic zones, industrial parks, hi-tech parks, etc. They expressed optimism that the conclusion of the Memorandum of Understanding between the Bangladesh Investment Development Authority (BIDA) and the Board of Investment (BoI), Sri Lanka would facilitate mutual investments. 

They further welcomed the conclusion of the Memorandum of Understanding between the Bangladesh Bank and the Ceylon Central Bank which should inter alia facilitate mutual collaboration in the financial sector and development of financial services.

Recognising the demographic profile and patterns of the two economies, both sides agreed to collaborate on the development of skills and human resources and encourage innovative partnerships. They welcomed the signing of the Memorandum of Understanding on Cooperation in ICT and Digital Technology inter alia to facilitate greater collaboration and partnership between the ICT and related knowledge industry and relevant private sectors of the two countries. They also noted with appreciation the signing of the Memorandum of Understanding between SLITA and CBIFT as an instance of innovative partnership

Recognising the potential for cooperation in maritime affairs and the blue economy between the two countries, the two leaders agreed to work together to explore new areas and innovative means to tap opportunities in developing the Bay of Bengal into a region of peace, growth and prosperity.

The two leaders underlined shipping as one of the key areas with potential for mutually beneficial cooperation which should result in improved connectivity and open up further opportunities for bilateral trade between the two countries and beyond. 

They called for an early conclusion to the ongoing negotiations on the Agreement on Coastal Shipping. They welcomed the signing of a Memorandum of Understanding between the Bangladesh Shipping Corporation and Ceylon Shipping Corporation.

Both sides recognised the importance of enhanced air connectivity to promote people-to-people contact, tourism and trade. The Sri Lankan side expressed optimism that Bangladeshi carriers would start operating flights to Colombo soon to meet growing traffic.

They also acknowledged the sizable presence of Sri Lankan workers and professionals in Bangladesh across the manufacturing and service sectors, making it one of the largest accumulations of Sri Lankan professionals in the region. They agreed to work towards facilitating movement for the citizens of both countries in a more mutually beneficial manner.

President Sirisena complimented Bangladesh’s advancement in poverty alleviation, rural development and ensuring food security of the people and accomplishments in the agriculture sector. The two leaders welcomed the conclusion of the Memorandum of Understanding to foster comprehensive cooperation in agriculture. 

They noted growing interest and potential for collaboration in agro-processing, agro-business, technological innovation and supply chain development involving the private sectors of the two countries in a beneficial manner. Bangladesh welcomed Sri Lankan farmers for a visit to train in agriculture extension practices and innovation in rice farming in Bangladesh.