Sri Lanka and Singapore`s cordial diplomatic relations have not been as robust in their trade and trade relations. The SLSFTA is expected to make significant changes to this situation. The agreement is expected to benefit both sides significantly. Sri Lanka is expected to benefit from the import of cheaper consumer and intermediate consumer goods, foreign direct investment and technology transfers, as well as healthy competition for local producers. Singapore`s businesses, meanwhile, will benefit from better access and investment opportunities in Sri Lanka`s growing economy, its skilled and productive labour base and Sri Lanka`s strategic position to further supplant trade in the Indian Ocean and the South Asian regional market. From a broader regional perspective, SLSFTA symbolizes a greater institutional link between South and Southeast Asia, as well as between global trade that encompasses the maritime areas of the Malacca Highway, the Bay of Bengal and the Indian Ocean. In this context, Singapore is working with India and Japan to develop the Trincomalee Port (the world`s fifth largest natural port) and the city of Trincomalee in northeastern Sri Lanka. Such integration of maritime trade and economy is good news at a time when the global trade outlook is threatened by uncertainty. Singapore and Sri Lanka are both the most capitalized on the SLSFTA to determine the benefits of free trade agreements and preserve the benefits of free trade.
Because the agreement is widely covered, Sri Lankan companies can take advantage of this agreement by taking advantage of the synergies it should have between trade, investment and services. It should be noted that following the signing of the agreement, many delegations travelled to Singapore to explore potential investment opportunities. However, the Department of Development Strategies and International Trade should have engaged in a much more robust process, with consistent cross-communication with all stakeholders involved in the SLSFTA. A more structured approach would have given more confidence to stakeholders in the process. We are encouraged by the cabinet`s decision of July 31, 2018 to institutionalize the Trade Negotiations Committee for future trade negotiations. Regular updates before and after the rounds of negotiations, similar to updating the status after the 9th round of ECTA[i] negotiations, should be a top priority of the negotiating committee. These updates should be made in a timely manner, as delayed publications alter their value. 3 International Trade Centre. (2018). Bilateral trade between Sri Lanka and Singapore in 2016. Available at: www.trademap.org/Bilateral.aspx?nvpm=1|144||702|||||TOTAL|||2|||11|1|||11||111|1.1.20122.de|1.1.20122.de Access to the market in Singapore was not a problem for Sri Lanka even before the agreement. Singapore is one of the most open economies in the world: 99% of imported goods are duty-free and few imports are prohibited.
COLOMBO: Singapore and Sri Lanka signed a free trade agreement on Tuesday (January 23rd) that will deepen economic relations and facilitate greater trade flows between the two countries. However, since the signing of the agreement, many local companies and politicians have criticized the SLSFTA. Singapore`s accession to the increasingly tariff-free bloc of Southeast Asian nations (ASEAN) means that Sri Lankan products will have better access to ASEAN markets. However, there were also concerns that a relaxation of the original criteria would mean that such traffic would work both ways, allowing ASEAN countries such as Vietnam, Thailand and Indonesia, which are more direct competitors with Sri Lanka than Singapore, to have better access to Sri Lanka.