The American Chamber of Commerce (AmCham) Sri Lanka hosted a round table discussion on Sri Lanka’s readiness for TPP.
The keynote speaker at the event was Dr. Nihal Pitigala, a prominent economist on trade and development and a long-term consultant for USAID and the World Bank.
Speaking on the readiness factor, Dr. Pitigala stated that this was a question that remained unanswered and required intense consideration of a range of issues which would have a long-term impact on the country’s status quo.
The TPP being like no other trade agreement previously negotiated, Dr. Pitigala said that WTO Plus and WTO Extra provisions such as e-commerce, environment, labour, small- and medium-sized enterprises, state-owned enterprises, finance, investment and regulatory coherence set the TPP apart from previous major trade deals. While the WTO permitted exceptions to the rules, there are minimal exceptions available under the TPP and they contain a stronger enforcement mechanism that will have broader consequences, both positive and negative, on non-members like Sri Lanka.
Discussing the impact of the non-participation on Sri Lanka, Dr. Pitigala added that apart from quantitative factors, the qualitative factors in terms of Sri Lanka›s future trading position viz a viz current and future FTA options, especially the impact of trading with developing countries as opposed to developed economies, among others, facilitating exchange of know-how, higher technology and investment in research and development, i.e. facilitating the process of transformation towards a higher standard that the former is likely to infuse.
Dr. Pitigala further stated that should Sri Lanka opt out of the TPP, the country should consider options to mitigate any adverse impact through a reform agenda on trade and investment especially at the time when FDIs are crucial for Sri Lanka, as investment trajectories indicate potential for investment diversion towards prospective TPP candidates.
Highlighting the implications of non-participation, he further pointed out that the likely regulatory harmonisation within TPP that may result would consolidate global supply chains within TPP territory which would likely impact non-members, something which ought to be considered.
An interactive session followed with members of the private sector attending the event. On the question of whether Sri Lanka is currently in a position to incur losses suffered as a result of liberalising trade, Dr. Pitigala responded that the existing and planned FTA would have introduced sufficient liberalisation of the tariff regime any future TPP likely to compensate for any such losses and bring about broader benefits that outweigh losses (hinting at the same time that an FTA of any kind was likely to have winners and losers).
Private sector feedback also revealed that major players were considering strategic global moves in order to plug into global supply chains, in the absence of a cohesive national policy to further Sri Lanka›s trade and investment interests.
Pointing out that TPP was far from a done deal, Dr. Pitigala concluded by reiterating the importance of stakeholder engagement at every level, creating awareness on the emerging trends of global trade.
He added that there was a strong likelihood of the TPP if sealed, aligning with the TTIP, which would result in Sri Lanka not being a part of over 60% of the world›s GDP in trade.