Indo-Lanka trade pact: Let the people know

Our comments today should have been on the Iraqi crisis but we withhold comments on this issue for a subject which is of vital national interest: the proposed Indo-Sri Lanka Fast Tract Trade Agreement. Our New Delhi Correspondent reported yesterday that Foreign Minister, Mr. Lakshman Kadirgamar and Indian Foreign Minister Jaswant Singh have agreed to this so-called free trade agreement and that President Kumaratunga will be signing it when she visits New Delhi towards the end of this month.

Readers who are familiar with current affairs will recall that when trade, economic or financial agreements are signed between two countries or with a regional bloc there is widespread discussion in the countries concerned about the impact of such agreements on the economies of the countries concerned and more important on the trades and livelihood of the people.The ding-dong battles between Europhiles and Eurosceptics of Britain down the decades are of relevance. As far as this proposed trade agreement is concerned — which will have repercussions in this country far more than any trade or political agreement signed before —— the people, media, the business community and even the professionals are blissfully unaware of the contents and fallout . On Thursday, we published a comprehensive analysis of what this agreement could hold out for Sri Lanka by one of this country’s most distinguished economists, Dr. J. B. Kelegama.

The agreement is said to be intended to narrow the vast trade imbalance that exists between India and Sri Lanka. But Dr. Kelegama pointed out that given the present state of affairs, it would not meet the intended objective. Reading through his analysis it is obvious that it could worsen the position for Sri Lanka and that the farmers — the backbone of Sri Lanka’s economy — could be wiped out.

The asymmetry between two countries, one with a billion strong population and another with only 20 million need hardly be stressed. In such a situation free trade between the two countries would only result in the smaller country being swamped with goods from the Big Brother while the Small Brother will not be able even to make himself heard, unless there are provisions protecting our interests written into the agreement.

Dr. Kelegama has pointed out that Sri Lanka is unable to produce the variety of exports that India needs. Our basic agricultural produce is aplenty there whereas industrial goods of India are in demand here. We do not need an economic pundit to tell us what this country’s plight would be in such circumstances. It was also pointed out that in the context of foreign investments, India, quite naturally because of the magnitude of its market has already attracted the multinationals. The multinationals see the Indian middle class market estimated at around 250 million to 300 million — bigger than most developed nations — is extremely fertile ground. The rest of South Asia is seen in a supplementary context. There is no hope of multinationals establishing their regional headquarters here to export to India and other countries in the region. It was also pointed out that where Indian investments in Sri Lanka are concerned, there were no tie-back agreements to export the manufactured products from Sri Lanka to India. Indian investments here are to meet the demands of our local market. Thus, how will unrestricted imports from India, duty free, help the besieged Sri Lanka economy?

Even more devastating is the point made that free import of agriculture produced at CIF prices which are far less than what the Sri Lanka farmers could produce, will sound the death-knell of our farmers.

The government has kept the people of this country in pitch black darkness where this agreement is concerned. Why cannot they spell out the contents of this agreement to the people before this agreement is signed. Even the Opposition seems to be blissfully unaware of this agreement or is unconcerned about it. Is this country being taken for a ride for whatever sinister purpose?

We do realise that India is our giant neighbour with whom we should have good relations. But there is no need to ruin our economy and make our farmers commit suicide. Let us keep in mind that every government in the post-Independence period had the objective of making this country self-sufficient in agricultural produce. Are we to barter away this sustained national effort of half century in the name of Abracadabras such as regional co-operation and free trade?

We strongly urge President Kumaratunga to let the people know the contents of this agreement and what it holds for the future of this country. The people have the right to know whether their economic freedom and all what successive generations have strived for are being sold down the drain.

Let the contents of the agreement be made public for the people to decide.