Brexit makes Lanka move faster towards economic tie up with India

COLOMBO: Britain’s decision to leave the European Union (EU),much to the disappointment of Sri Lanka, has forced the Lankan government to seek closer economic ties with India, China and the rest of Asia.

Prime Minister Ranil Wickremesinghe announced in Galle on Sunday, that the Minister of Development Strategies and International Trade, Malik Samarawickrama, would be going to New Delhi next week for talks on the proposed Indo-Lanka Economic and Technical Cooperation Agreement (ETCA).

The Prime Minister said that with the British leaving the EU, the EU  might be considerably weakened. This in turn would adversely affect Lanka because the EU presently accounts for 40 per cent of Lanka’s exports. It is therefore imperative that Lanka enters into Free Trade Agreements or strengthens existing FTAs and other economic pacts with Asian countries like India and China, he said.

It was in this context that he said that Minister Samarawickrama would be heading for Delhi for talks on ETCA next week.

Mooted at the highest political levels in New Delhi and Colombo in 2014, ETCA is nevertheless strongly opposed by Lankan professionals and entrepreneurs because they fear swamping by Indian goods and service personnel.

That the agreement intends to have safeguards and at any rate will not allow movement of personnel, are overlooked.

Prime Minister Wickremesinghe is however very keen on ETCA. At his instance, the government has been publishing articles in newspapers presenting the need to end protectionism and come out of cocoons to face the world bravely for a bright national future.

Since both UK and EU will be in trouble economically and politically in the coming months, the traditionally pro-Western Wickremesinghe is now looking East. He has formed a committee comprising top economists and economic administrators like P.Paskaralingam, Dr.Indrajit Coomaraswamy, Dr.Saman Kalegama and Central Bank Governor Arjuna Mahendan, to quickly draw up a plan to tie the Lankan economy to Asia and reduce its historical dependence on Western markets.

Wickremesinghe said that he would discuss the experts’ report with President Maithripala Sirisena and with all stakeholders before tabling it in parliament. In the meanwhile, he said he would try and quickly enter into a country-specific trade agreement with the UK.