TRADE PACT WITH INDIA (98 Dec 30)
The President Ms. Chandrika Kumaratunga signed a new trade pact with the Indian Prime Minister Shri Atal Behari Vajpayee in New Delhi, India. According to the free trade pact India will provide duty free access to about 1000 Sri Lankan items while Sri Lanka will exempt about 300 Indian items from duties.
The details of the free trade pact are not known but on paper it appears that it is in favour of Sri Lanka. However in practice it could be quite different and Sri Lanka may not be able to compete with her giant neighbour.
Already the potatoe farmer in the upcountry region is heavily affected due to imports from India. They cannot compete with the Indian producers as the cost of production in India is very much low compared to that in Sri Lanka.
Sri Lanka should have studied the pact in detail, especially with respect to what could happen in practice before it was signed.