The Framework agreement of the Comprehensive Economic Partnership Agreement (CEPA) with India will not be signed during the SAARC Summit as earlier planned.
A senior official of the Department of Commerce told the Island Financial Review that more work had to be done on CEPA and that it had only been a proposal to sign it during the SAARC Summit.
"The framework is completed and is with the Cabinet so there is not enough time to finalise the document which would have been signed by the two heads of state," he said.
The framework is a seventy page brief on CEPA. It defines CEPA and contains the purposes for such an agreement.
However, he said it was a very basic document and it would be difficult to consult with stakeholders without anything in it.
"The schedules are not finalized. It would take a few more months by the time a comprehensive document can be finalized."
The schedules will contain the specific agreements in the areas of trade in goods, services and investments and more consultation with stakeholders are required before a final draft can be produced.
"A much more comprehensive draft will be required to engage stakeholders for their recommendations."
He said the Department of Commerce was aware of what exactly will go into the schedules but the services sector will require much more work and consultations.
Political pressure to desist from signing the framework is another reason why it will not be signed during the SAARC Summit.
"The problem was that information was not disseminated enough. There were some politicians who called us to find out about CEPA and others did not. However the details about the framework had not been given proper circulation."
It was the Department of Commerce who was responsible for the negotiations and stakeholder consultations.
But he suggests that the framework alone, which is with the Cabinet, will not be enough to make them, the politicians, understand the positive and negative aspects of CEPA.
"It is better if the schedules can be completed, because then it will be easier for them to understand what CEPA would contain. And there is no doubt that many who had opposed CEPA would see more of its benefits," he said.
As far as the private sector is concerned he said the consultations had been comprehensive and wide reaching.
"We could not talk to everyone obviously, but to say that the negotiation process was sans consultation is an untruth," he said.
The government’s decision to sign the framework in the backdrop of the SAARC Summit was most probably prompted because it would have been appropriate to have the two heads sign the agreement rather than the two trade ministers at a later date.
"It is always better to make the agreement as comprehensive as possible. So once the schedules are completed the two governments will be able to sign an agreement with significant substance," he said.
He could not specify a time-frame, but said it could take months with Cabinet deliberations and more stakeholder consultations.
An official involved in the negotiation process told the Island Financial Review last week that it was Sri Lanka that had wanted the CEPA agreement signed during the SAARC Summit.
This was because a No Confidence Motion pushed by the Indian opposition party BJP put doubts on the survival of Indian Prime Minister Man Mohan Singhe’s ruling coalition government.
When CEPA was first mooted in 2003 the UNP government had wanted it finalized by 2004. However, a change in governments of both countries prevented CEPA from seeing the light of day, because the new governments and their newly appointed officials wanted more time to study CEPA.
Some industrialists accused the Indian government of forcing Sri Lanka to sign the framework during the SAARC Summit.
"India’s export bill is about US$ 168 billion of which exports to Sri Lanka is only about US$ 2 billion so there is no reason why India would want to force Sri Lanka into CEPA. It is Sri Lanka that will have much more to gain," he said.
The senior official of the Department of Commerce said that no country had pushed for the signing of the framework during the SAARC Summit.
"It just sounded like a good idea," he said.
