Will Sri Lanka and China be pressure for the ALE or will simply engage in economic diplomacy?
A long-free free trade agreement (ALE) between Sri Lanka and China seems to be back on the agenda, even if analysts warn that the South Asian nation in the crisis should not benefit a lot for years after its implementation.
Sri Lanka officials are carefully optimistic that the ALE could help reduce the huge trade deficit of the country with China.
Proposed for the first time in 2014, talks between the two parties for an ALE have been suspended for six years because Sri Lanka has not accepted some of the conditions.
Last week, the Chinese Minister of Commerce Wang Wentao called for a complete Ale between the two countries “in a package”. Speaking during Sri Lanka – China Trade Forum and Investment Forum in Colombo, Wang said that negotiations for the agreement should be based on a “mutual advantage”.
His comments came after Sri Lankan President Anura Kumara Dissanayake in January went to Beijing where he met President Xi Jinping and other Chinese leaders to discuss the deepening of bilateral links in various fields. During the trip, China has committed to supporting the economic development of Sri Lanka and improving cooperation in the Belt and Road initiative.
Among the belt and road projects that China has developed in Sri Lanka in recent years are Mattala Rajapaka International Airport, the Hambantota International Port and the Port City of Colombo.
