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S’pore and Sri Lanka sign FTA to facilitate greater trade flows

SINGAPORE ― The Republic and Sri Lanka have signed a bilateral free trade agreement (FTA) — the first modern and comprehensive one for the South Asian nation — to boost commerce, trade, and investments between the two island nations.

S’pore and Sri Lanka sign FTA to facilitate greater trade flows

The free-trade agreement between Singapore and Sri Lanka will boost commerce, trade, and investments between the two island nations. Photo: Reuters

SINGAPORE ― The Republic and Sri Lanka have signed a bilateral free trade agreement (FTA) — the first modern and comprehensive one for the South Asian nation — to boost commerce, trade, and investments between the two island nations.

Visiting Prime Minister Lee Hsien Loong and Sri Lanka President Maithripala Sirisena witnessed the signing of the agreement in Colombo on Tuesday (Jan 23).

The FTA will give companies in Singapore and Sri Lanka greater access to each other's markets across various sectors, including services, e-commerce, telecommunications, and government procurement.

Key benefits, once the agreement enters into force, include the elimination or lowering of tariffs that would allow Singapore exporters to save about S$10 million a year.

Singapore companies would also be allowed to bid for projects by the Sri Lankan government or its state-owned enterprises. The FTA would put in place investment safeguards against discriminatory treatment based on nationality.

"(The signing of the free trade agreement) will position Singapore as an early and supportive partner of Sri Lanka's economic liberalisation plans and development," Singapore's Ministry of Trade and Industry (MTI) said in a press release.

"Singapore companies will benefit from tariff-access for 80 per cent of all tariff lines, enhance access to services sectors and procurement markets and greater protection for their investments."

Bilateral trade between the two countries reached about S$2.7 billion in 2017, making Sri Lanka Singapore's 36th-largest trading partner. Some of Singapore's top exports to Sri Lanka include petroleum oil and diesel fuel, non-monetary gold and jewellery, while top imports from Sri Lanka include motor spirit, fuel oils, perfumes, clothing accessories and wheat flour.

Singapore companies, such as those in the construction, manufacturing, and service sectors, have established a presence in Sri Lanka since the early 1990s.

For example, Prima Holdings, the largest Singapore-based investor in Sri Lanka, has a wide range of investments in the South Asian country, ranging from wheat flour milling to property and IT services.

Mr Lee's three-day official visit to Sri Lanka began on Monday. He will proceed to New Delhi from Jan 24 to 26 to attend the Association of South-east Asian Nations-India Commemorative Summit. All 10 Asean leaders will be the chief guests at India's annual Republic Day parade on Jan 26.

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