China-Sri Lanka signs Free Trade Agreement

November 17, 2024

Development - Provincial

China-Sri Lanka signs Free Trade Agreement

December 25, 2014

China and Sri Lanka has signed a memorandum of understanding and agreed to establish a joint working group on trade to study the feasibility of a China-Sri Lanka free trade agreement and measures to enhance Sri Lankan exports to China. A joint feasibility study on the proposed FTA was completed in March 2014 and concluded that the building of an FTA will bring benefits to both countries.

Although Sri Lanka’s exports to China have increased from US$ 28.39 million in 2005 to 121.63 million U.S. $ in 2013, trade balance remains significantly in favor of China. Bilateral trade reached US$3.62 billion in 2013. Sri Lanka hopes the FTA will help the country to gain easier access to the Chinese market and gradually reduce its trade deficit towards the world’s second largest economy. Some of Sri Lanka’s main export items to China include coir fiber, garments, tea, rubber and precious stones.