FREE TRADE AGREEMENT BETWEEN SRI LANKA AND SINGAPORE

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To view the text and schedules of the Free Trade Agreement between Sri Lanka and Singapore click here.

 

 

1. What is the Scope of SLSFTA?

SLSFTA is the first comprehensive trade agreement signed by Sri Lanka featuring chapters on following trade related aspects:

  • Goods
  • Sanitary and Phytosanitary measures
  • Technical Barriers to Trade
  • Services
  • Investment
  • E-commerce
  • Telecommunication
  • Trade remedies
  • Customs procedures and trade facilitation
  • Competition
  • Government procurement
  • Intellectual Property rights
  • Transparency provisions
  • Dispute settlement
  • Economic cooperation

 2. What are the key elements of tariff Liberalisation process under the SLSFTA?

The goods schedule of the SLSFTA covers 7,438 tariff lines at HS 8 digit level.

  • Sri Lanka:    80% of tariff lines are to be phased over a period of 15 years    |    20% of tariff Lines are in the negative list
  • Singapore:   Has already liberalised 99.9% of tariffs

CESS and PAL applicable on imports will be eliminated in 5 equal installments between the 6th to the 10th year of the FTA. Elimination of CESS and PAL will not applicable on products in Sri Lanka’s negative list.

3. What are the special features of the Rules of Origin (ROO) criteria?

SLSFTA has new features added to ROO criteria with the inclusion of Product Specific Rules (PSRs) with 1866 products having flexible rules in addition to products covered by the general rule.

General Rule: 5099 tariff lines

Product Specific Rules:1866 tariff line

- 35% Domestic Value Addition (DVA)

                            or

- Change of Tariff Heading (CTH)

  at HS 4 digit level

- Change in Tariff Subheading (CTSH) at     

   6 digit level

 

- Chemical rule

 

4. What are Sri Lanka’s Commitments under Trade in Services?

  • Unbound in mode 4 except for the movement of Business visitors and intra corporate transferees. (refer annexure 02: Services Trade – 04 Modes of Supply)
  • Movement of intra corporate transferees are linked to investment where commitments made under mode 03 (commercial presence)
  • Intra-Corporate transferees are limited to defined skilled categories: Specialists, Managers and Executives.

5. Are Professional services covered in SLSFTA?

Yes. Professional services commitments are limited to Mode 1. There are no commitments in Mode 4 or Mode 3.

  • Legal advisory services: Limited to international and third country law (excludes Sri Lankan law).
  • Architectural services: Limited to pre design advisory services (not architectural practice)
  • Engineering Services  - Limited to pre design advisory services (not engineering practice)

 

 

  Annexure 01: Infographics on Sri Lanka – Singapore Trade Relations in 2016  

Data sources: UN Comtrade database, Sri Lanka Tourism Development Authority and Board of Investment Sri Lanka - Singapore Tourism Board 

 

 

  Annexure 02: Services Trade – 04 Modes of Supply  

 

How Does a Cross-Border Trade in Service Take Place?

A service is traded when an economic exchange takes place between a resident and non-resident regardless of the location of the transaction being made.

 

What are the 04 modes of services?

General Agreement of Trade in Services (GATS) of the World Trade Organisation (WTO) defines 04 ways in which a service can be traded, known as "modes of supply"

 

Mode of Supply

Supplier Presence

Mode 1

Cross-border supply of services 

Services are supplied from one country to another without requiring physical movement of either supplier or consumer. Only the service crosses the border, usually delivered through information and telecommunications

Service Supplier is not present within the territory of the of the member

Mode 2

Consumption abroad 

Services are provided to another country’s citizens, who are required to travel to the territory where the services are located in order to benefit from the service.

Mode 3

Commercial presence 

Company from one country establishes subsidiaries or branches to provide services in another country

Service Supplier is present within the territory of the territory of the member

Mode 4

Movement of natural persons           (distinct for legal person)

Requires cross border movement of a natural person. Service providers travel from their own countries to supply services in other countries.

 

Mode 4 can be further classified into 4 categories;                                             

  • Business visitors (BVs): Are not engaged in supplying the service or making direct sales to the public, and do not receive remuneration from a source in host Member. This cross border movement often takes place for activities such as to negotiate a sale of a service, establish business contacts, attend business meetings and similar.
  • Intra-corporate transferees (ICT): Employee of a foreign company who has commercial presence under mode 3 crosses the border to supply services in the commercial establishment set up in the host county.
  • Contractual service suppliers (CSS): Self-employed (independent) service supplier or employee of a Foreign Service supplier (who do not have a commercial presence via mode 03) crosses the border in order to provide a service on the basis of a contract their employer has concluded with a consumer in host country.
  • Independent professionals (IP): self-employed person based from one country crosses the border in order to supply a service on the basis of a services contract with a consumer in the host country.

 

Example from the education services sector:

Mode

Example

Mode 1

Online education courses provided by foreign universities.

Mode 2

Sri Lankan Students going for higher studies in overseas universities

Mode 3

Sri Lankan students studying in subsidiaries of foreign universities situated in SL

Mode 4

Foreign lecturers moving to Sri Lanka to lecture students

 

 

Example from the health services sector:

Mode

Example

Mode 1

Trade across borders through mail and electronic media

(E.g. air freight of lab samples, internet consultations and medical education etc.)

Mode 2

Sri Lankan patients travelling to another country to obtain healthcare services.

Mode 3

Establishment of a foreign company/subsidiary for the provision of health services.

(E.g. health management services, health insurance etc.)

Mode 4

Doctors and health consultants visiting Sri Lanka for the provision of health services.

 

 

DISCLIAIMER:

This trade brief is part of the Chamber’s ‘Trade Intelligence for the Private Sector’ (TIPS) initiative, where we bring our members fresh insights into global and national trade policy issues. The content of this trade brief was developed based on an interview the EIU conducted with the Chief Negotiator of the Singapore - Sri Lanka Free Trade Agreement (SSLFTA) and from insights gathered at the seminar on SSLFTA conducted by the Ceylon Chamber of Commerce.

All information collected and analysed is derived from sources, which we consider reliable and a sincere effort is made to report accurate information. The EIU does not warrant the completeness or accuracy of information derived from secondary sources. Details published herein are intended for information purposes only.

For any clarifications/queries on SLSFTA, you may contact Ms S W C Jayamini, Director at MODSIT on +94112431832

The Ceylon Chamber of Commerce

Economic Intelligence Unit

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