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Sri Lanka Resumes FTA Talks With China As Debt Restructuring Talks Proceed With Foreign Creditors
Sri Lanka Resumes FTA Talks With China As Debt Restructuring Talks Proceed With Foreign Creditors
Sputnik International
The Chinese commerce ministry says that a free-trade agreement with Sri Lanka, which would be its third in south Asia, after similar pacts with Maldives and... 30.09.2022, Sputnik International
2022-09-30T15:34+0000
2022-09-30T15:34+0000
2022-10-01T13:35+0000
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Sri Lanka and China have resumed talks on a free trade agreement (FTA) between the two nations, Colombo’s envoy to Beijing Palitha Kohona told the South China Morning Post (SCMP) on Friday.The Sri Lankan ambassador said that an “asymmetric” pact was apt at the moment given how much smaller Sri Lanka's economy was than China’s.“We are in a hurry because we would like to see more goods get access to the Chinese market,” he added.In 2020, Sri Lanka imported $4Bln of Chinese goods, and it exported products worth $266Mln.Kohona said that both the countries are considering liberalizing 80 percent of the traded goods. He said that an FTA with China could lead to a surge in the number of Chinese tourists visiting the South Asian island nation and promote the export of Sri Lankan textiles, tea, garments and underwear to the Chinese market.The Ambassador said that Beijing understood that Sri Lanka was more “stable” now than it was two or three months ago, when anti-government protestors stormed the presidential palace, leading to then President Gotabaya Rajapaksa fleeing the country.Rajapaksa, who has since resigned from his position, returned to Sri Lanka this month.Sri Lanka also announced a default on its foreign debt repayments to the tune of $51Bln in April, as depleting forex reserves caused a shortage of food, fuel and other essentials. Consumer inflation last month reached a record high of 70.2 percent, according to the latest statistics from last week.The International Monetary Fund (IMF) this month approved a $2.9Bln loan to Colombo under an Extended Fund Facility (EFF) to “restore macroeconomic facility”.However, the Washington-based lender has yet to disburse any funds under the bail-out deal, with funds set to be made available to Colombo only if manages to get assurances that its foreign creditors would restructure their respective debt.Sri Lanka’s main creditors - Japan, China and India - have yet to agree formally on a restructuring of their borrowings to the nation. But President Ranil Wickremesinghe said last week that the government was expecting to receive the IMF funds before the end of this year.
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Sri Lanka Resumes FTA Talks With China As Debt Restructuring Talks Proceed With Foreign Creditors
15:34 GMT 30.09.2022 (Updated: 13:35 GMT 01.10.2022) The Chinese commerce ministry says that a free-trade agreement with Sri Lanka, which would be its third in south Asia, after similar pacts with Maldives and Pakistan, is “under negotiation”. Chinese Premier Li Keqiang said in April that Beijing hoped to conclude an FTA with Colombo, according to an official statement.
Sri Lanka and China have resumed talks on a free trade agreement (FTA) between the two nations, Colombo’s envoy to Beijing Palitha Kohona told the South China Morning Post (SCMP) on Friday.
Kohona said that negotiations between officials from the two countries for an “asymmetric” trade agreement have been taking place for the past two months. Formal talks for an FTA between Beijing and Colombo kickstarted in 2014, with five rounds of negotiations having been held since 2017.
The Sri Lankan ambassador said that an “asymmetric” pact was apt at the moment given how much smaller Sri Lanka's economy was than China’s.
“We are in a hurry because we would like to see more goods get access to the Chinese market,” he added.
In 2020, Sri Lanka imported $4Bln of Chinese goods, and it exported products worth $266Mln.
Kohona said that both the countries are considering liberalizing 80 percent of the traded goods. He said that an FTA with China could lead to a surge in the number of Chinese tourists visiting the South Asian island nation and promote the export of Sri Lankan textiles, tea, garments and underwear to the Chinese market.
The Ambassador said that Beijing understood that Sri Lanka was more “stable” now than it was two or three months ago, when anti-government protestors stormed the presidential palace, leading to then President Gotabaya Rajapaksa fleeing the country.
Rajapaksa, who has since resigned from his position, returned to Sri Lanka this month.
Sri Lanka also announced a
default on its foreign debt repayments to the tune of $51Bln in April, as depleting forex reserves caused a shortage of food, fuel and other essentials. Consumer inflation last month reached a record high of 70.2 percent, according to the latest statistics from last week.
The International Monetary Fund (IMF) this month approved a $2.9Bln loan to Colombo under an Extended Fund Facility (EFF) to “restore macroeconomic facility”.
However, the Washington-based lender has yet to disburse any funds under the bail-out deal, with funds set to be made available to Colombo only if manages to get assurances that its foreign creditors would restructure their respective debt.
Sri Lanka’s main creditors - Japan, China and India - have yet to agree formally on a restructuring of their borrowings to the nation. But President Ranil Wickremesinghe said last week that the government was expecting to receive the IMF funds before the end of this year.
