The only difference is that the shoe is on the wrong foot; this is old wine in a new bottle or that the actors have changed places.  The issues are the same; the fears unchanged, particularly fear of the unknown. It is a virtual replay of the same game – if one uses cricketing parlance [...]

The Sunday Times Sri Lanka

ETCA vs CEPA: Fear of the unknown


The only difference is that the shoe is on the wrong foot; this is old wine in a new bottle or that the actors have changed places.  The issues are the same; the fears unchanged, particularly fear of the unknown. It is a virtual replay of the same game – if one uses cricketing parlance to describe opposition to the proposed Indo-Lanka Economic and Technology Cooperation Agreement (ETCA). Will the new trade pact go the way of the proposed Comprehensive Economic Partnership Agreement (CEPA) which was abandoned due to protests from industrialists?

The debate on ETCA is hotting up and stirring controversy. Proponents and opponents are bracing for a confrontation – hopefully through debate and not blood-letting on the streets – while opportunists are waiting on the sidelines to enter when the going is good and turn it into a political issue. There is a simple philosophy which cuts through the tread of thinking and debate on both occasions (CEPA and ETCA): Lack of transparency of the process and lack of public consultations. As in every debate, the issue has become very politicised to the extent that the real issues have been relegated to the background.

While Prime Minister Ranil Wickremesinghe slammed the Government Medical Officers’ Association (GMOA) which was inexcusable given the policy of free speech and free thinking embodied in the new government’s mandate, former President Mahinda Rajapaksa’s foray into the current debate is also amusing. President Maithripala Sirisena, who assured entrepreneurs at a 2015 meeting of the Chamber of Young Lankan Entrepreneurs that he will not go ahead with CEPA or any agreement (with a foreign country) that is detrimental to the domestic industry, appears to be silent on the drama unfolding.

Rajapaksa has urged the government to table the proposed ETCA and also consult all stakeholders including the public before making a final decision on the proposed deal with India. He has said that though the Premier says discussions have been held with professionals on the matter, there is no evidence to show that such an exercise has happened.
However Rajapaksa’s other comment that CEPA was not approved during his (Rajapaksa’s tenure) and former President Chandrika Kumaratunga’s tenure due to protests from professionals, is far from the truth. The fact remains that it was business pals of the former regime that ‘gently’ persuaded Rajapaksa to abandon the process.

They and other corporate giants like Ceylon Biscuits chairman Micky Wickramasinghe and Laugfs Gas founder W.K.H Wegapitiya took to the streets opposing CEPA saying it would ruin local industry due to fears of a surge in cheaper imported Indian goods. This was the first time powerful business personalities got onto the street in a street protest to oppose a proposed trade pact. Wickremesinghe has said that the proposed ETCA was discussed with some professional groups but the process of consultation leaves a lot of doubt in the minds of people. For instance late last year a group of garment industrialists were asked to come for a meeting at the Colombo office of the Ministry of Development Strategies and Industrial Trade to discuss GSP+ issues.

At the eleventh hour they were told to report to the parliamentary complex where the meeting took a different turn with different issues discussed and included severe criticism of the industrialists in the presence of trade unions. Over and over, in the current and past debates (CEPA and ETCA), the lack of consultation and public discussion has become the main problem. This is a core issue, even more today, in the context of the 14 month-old government striving to create an image of public consultation on major issues like re-drafting of the Constitution. There are positives, no doubt, as evidenced in public consultations on a proposed new Constitution – a much bigger issue which has not drawn criticism for the simple reason that society is being consulted in a well-thought out process.

There are many other ‘White Papers’ (public discussion on a government proposal) in circulation seeking public comments, clarifications or insertions. This is commendable. However, not going through the same process ahead of preparing a draft ETCA for public discussion by an administration that has promised open discussion (also an election promise) is, to put it mildly, puzzling. Even when the controversial Central Bank Treasury bond issue drew criticism when a committee of pro-UNP lawyers was appointed to examine the bond transaction, the Prime Minister agreed to the appointment of a parliamentary committee to review the dubious deal, a process which is underway.

If the government was willing to ask parliament to scrutinise the bond issue, why isn’t the government willing to make public the ETCA proposals which has far greater ramifications to the people, than the bond case? These are issues raised by the public and triggering, probably, unnecessary fears. Will Sri Lankans lose jobs to cheaper Indian semi skilled and professional services? Will local industry suffer from cheaper Indian products? These are questions that surfaced during the CEPA debate and resurfacing again in the absence of the actual contents of proposals being made available to the public.

And, these concerns are understandable. For example while Indians are recorded as the highest source market for tourist arrivals in Sri Lanka, quite a few arrive on 1-2 day visits carrying goods for the “Pettah” market while there are also Indians who arrive on visit visas and stay back to work in restaurants, small hotels, etc. An informal workforce of Indians in Sri Lanka has taken root amidst occasional raids by immigration authorities to nab overstaying tourists.
Last year, according to immigration officials there were some 30,000 Indians who overstayed visas.

At a May 2015 discussion at the Organisation of Professional Associations (OPA) on plans to revive CEPA, there was a clear call for the CEPA document (then there was no discussion on an entirely new trade pact) to be made public in this era of transparency. It was also pointed out that, CEPA or no CEPA, Sri Lankan systems are weak and low-skilled and mid-level foreigners are working in the country, using various ruses to evade detention. The Business Times in an editorial dated May 30, 2010 titled “Jostling over CEPA”, said:

“The CEPA agreement is yet to be available for public scrutiny while only a few have access to the document, and there lies the problem. No one knows what exactly is contained in the agreement and in such a situation, there are concerns, worries. In recent times, there have been instances where proposed government policy has been open for public debate and access. Transparency is the key and the same principle should apply here. Otherwise the protests will continue – justified or not.”

Similarly in the absence of public scrutiny of the ETCA proposals and its details, one can only make assumptions on its contents. Officials have been tight-lipped to media queries on the details or even a civil society call for details. This makes even more relevant today the need of a Freedom of Information Act where the public access to information, barring sensitive issues of national interest, becomes a legal right. Concerns over the ETCA can only be overcome, – if there is no hidden agenda in the ETCA as repeatedly proclaimed by the government – by the release of a ‘White Paper” on the ETCA.

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