Sri Lankan MPs clash over CEPA with India

COLOMBO: Sparks flew in the Sri Lankan parliament as supporters and critics clashed over the proposed Comprehensive Economic Partnership Agreement (CEPA) with India.

India announced in July that the CEPA would be signed on the sidelines of the SAARC summit that ended here August 3.

But Sri Lanka, coming under pressure from the radical Marxist Janatha Vimukthi Peramuna (JVP), postponed the event indefinitely claiming that it needed time to discus the deal with local stakeholders.

If the JVP and its breakaway group led by its former propaganda secretary Wimal Weerawansa breathed fire on the deal and urged the government to abandon it, the pro-Tamil Tiger Tamil National Alliance (TNA) urged the government to go ahead with it without "succumbing to political pressure".

The house took up the issue Tuesday during an adjournment motion moved by MP Wimal Weerawansa, who argued that the proposed agreement would deal a crippling blow particularly to the service sector of Sri Lanka's economy.

According to media reports, Weerawansa expressed fears that the deal, the first of its kind in Sri Lanka, would leave local enterprises in doldrums because of the possibility of Indian investors gaining the upper hand, according to the provisions of the deal.

Bimal Ratnayake of the JVP charged that the government had decided to sign the deal with India in a hurry without consulting the "true industrialists" in the country.

"Today Mahinda Rajapaksa government has knelt before India and is betraying us to India. Today Chinese involvement in Sri Lanka has increased by 10 fold and India is not happy with this situation," the state-run Daily News quoted JVP MP Ratnayake as saying.

Udawatte Nanda Thera, a MP from the Jathika Hela Urumaya (JHU) - an influential party of Budhist monks - has said that the Sri Lanka had benefited "very little" from the Free Trade Agreement (FTA) with Indi and added that CEPA would mean a one-way traffic for Indian entrepreneurs.

Joining the debate, the parliament group leader of TNA, R Sampanthan, claimed that the country "is in a terrible situation with regard to economy and national problem" and stressed that the CEPA should be signed considering the economic benefits to both the countries.

"India is ready to contribute to smaller countries in the SAARC region in a much bigger way. We should go forward," he said.

Colombo district MP of the main opposition United National Party (UNP) Ravi Karunanayake has hailed the CEPA as one that "would help Sri Lanka tremendously", but stressed the need for consultation with the country's chamber of commerce to accommodate their views.

Responding to questions, Minister of Export Development and International Trade, GL Peiris, dispelled the views that India had forced Sri Lanka to conclude the deal in a hurry.

"India has granted a lot of duty free concessions to Sri Lanka and we are aiming to widen and deepen the market access to India. Through this proposed agreement we have access of eight million pieces of fabric to the Indian market," Minister Peiris said.

So far India has signed such CEPA only with Singapore in 2005. It is holding talks with South Korea, Japan and the European Union to enter into the same.

India signed a Free Trade Agreement (FTA) with Sri Lanka in 1999. As a result, Sri Lanka's volume of trade with India increased from $49 mn to $516 mn. India's trade volume with Sri Lanka has increased from $549 mn to $2.7 bn between 1999 and 2007.