A Free Trade Agreement (FTA) between China and Sri Lanka was signed in 2017, marking a new era in the economic cooperation of the two countries. The agreement is expected to boost trade and investment between the two countries, which have a long history of economic and cultural ties.
The FTA is a comprehensive agreement that includes trade in goods, services, and investment. It covers a wide range of products, including agricultural products, industrial goods, and textiles. The agreement also provides for the elimination of tariffs on a large number of goods and services traded between the two countries.
The FTA between China and Sri Lanka is expected to bring significant benefits to both countries. For Sri Lanka, the agreement will open up new opportunities for exporting goods and services to China, which is the world’s second-largest economy. It will also provide Sri Lankan businesses with access to a large market of Chinese consumers, which could help to drive economic growth and create jobs.
For China, the FTA will provide access to Sri Lanka’s strategic location in the Indian Ocean, which is a key hub for shipping and logistics in the region. This will enable Chinese businesses to expand their reach into the South Asian market and beyond. In addition, the FTA will help China to diversify its sources of raw materials and energy, as Sri Lanka is a major producer of many commodities such as tea, rubber, and coconut.
The FTA between China and Sri Lanka is also expected to deepen the cultural ties between the two countries. Both countries have a rich history and cultural heritage, which could be further explored through increased tourism and cultural exchanges.
However, there are also concerns that the FTA could have negative impacts on certain sectors of the Sri Lankan economy. Some local businesses have expressed concerns about increased competition from Chinese imports, which could potentially harm domestic industries. There are also concerns about the environmental impact of increased economic activity, particularly in the context of China’s Belt and Road Initiative (BRI), which includes large infrastructure projects in Sri Lanka.
Overall, the FTA between China and Sri Lanka has the potential to bring significant benefits to both countries, including increased trade and investment, economic growth, and cultural exchange. However, it is important to address the potential challenges and risks associated with the agreement, and to ensure that the benefits are shared equitably among all stakeholders.