ECONOMYNEXT – Sri Lanka should make joining the Regional Comprehensive Economic Partnership (RCEP) a priority instead of trying to negotiate multiple smaller deals, an economist has said.
“We do not have the bandwidth in government and the technical resources to do multiple trade agreements,” Anushka Wijesinghe an economist who has been involved in trade told a business forum in Colombo.
“I think RCEP should be number one priority, rather than three or four tiny bilateral goods agreements.”
Sri Lanka is trying negotiate a free trade deal with China and expand an existing one with India.
Data show that Sri Lanka has been able to boost exports with FTAs.
Sri Lanka has high tariff protection which ultimately backfire.
Sri Lanka has protectionist business interests their profits from overpriced goods have had priority over ordinary consumers and overall economic efficiency that comes from free trade.
Sri Lanka also has monetary instability, which has worsened under flexible inflation targeting, with a series of currency crises coming in rapid successions.
Forex shortages from mis-targeted interest rates under flexible or discretionary monetary policies have discredited free trade and liberalization in general and strengthened the hands of economic nationalists, analysts say.
The country also has monetary instability, which makes life difficult not only for investors but all economic agents.
Over the past two decades Sri Lanka’s exports have not grown as much as competitors. (Colombo/Dec05/2022)