By The Pulseline News Desk
Sri Lanka is moving to overhaul how it negotiates free trade agreements (FTAs), with the Cabinet approving the establishment of a National Trade Negotiation Committee tasked with reviewing existing deals and guiding negotiations with future bilateral and regional trading partners.
Foreign Minister Vijitha Herath has said the new mechanism would not be limited to Sri Lanka’s trade agreements with India and China but would cover all existing agreements as well as proposed future FTAs.
“The objective of the committee is to review the current trade agreements and amend clauses where there are disadvantages to us,” Herath has told reporters at the post-Cabinet media briefing.
The move follows the Cabinet’s decision to implement recommendations made by a committee appointed to assess Sri Lanka’s existing FTAs and determine the country’s future direction on trade agreements.
According to the Cabinet decision, the Government wants to move towards a more targeted, sequential and evidence-based approach to negotiating FTAs, while strengthening stakeholder consultation before new agreements are concluded.
The Cabinet has approved the appointment of the Secretary to the Ministry of Trade, Commerce, Food Security and Cooperative Development as Chairman of the National Trade Negotiation Committee as well as Chief National Trade Negotiator.
The new structure will also include 12 subject-specific sub-committees and technical working groups, intended to provide specialised input during negotiations.
In addition, a Trade Policy Advisory Committee will be established, bringing together trade experts, researchers, business representatives, professional associations, civil society and relevant government officials.
The advisory committee will provide technical and policy advice to the National Trade Negotiation Committee, formulate recommendations for Cabinet on trade agreements and help establish mechanisms for sustained consultation and communication with stakeholders.
The Government’s decision comes as Sri Lanka seeks to recalibrate its trade strategy after decades of uneven progress in expanding market access.
Sri Lanka’s FTA framework began with the landmark 1998 Indo-Sri Lanka Free Trade Agreement, followed by agreements including the Sri Lanka-Singapore FTA in 2018 and the Sri Lanka-Thailand FTA signed in 2024.
However, efforts to deepen trade integration with some of the country’s largest economic partners have proved considerably more complicated.
The negotiations with India, particularly over the proposed Economic and Technology Cooperation Agreement (ETCA), have remained politically sensitive for years.
The agreement has faced opposition from sections of Sri Lanka’s professional and business communities, who have raised concerns that greater liberalisation of services could expose domestic professionals and industries to increased competition from India.
Negotiations with China have faced a different set of challenges.
While Beijing has pushed for broader tariff liberalisation, Sri Lankan negotiators have sought greater safeguards and concessions, particularly in view of the significant trade imbalance between the two countries.
The establishment of the new negotiating structure could therefore signal an attempt by Colombo to move away from ad hoc and politically driven trade negotiations towards a more institutionalised process.
It also comes at a time when Sri Lanka is seeking to expand exports, attract investment and integrate more deeply into regional supply chains as part of its post-economic-crisis recovery.
The Government’s emphasis on reviewing existing agreements before entering into new ones suggests that it intends to assess whether current FTAs are delivering sufficient benefits for Sri Lankan exporters while limiting potential risks to domestic industries and government revenue.
The new committee will also have to navigate the geopolitical dimension of Sri Lanka’s trade policy.
India and China remain among Sri Lanka’s most important economic and strategic partners, while competition between the two powers for influence in the Indian Ocean adds another layer of sensitivity to Colombo’s trade and investment decisions.
For the NPP Government, the challenge will be to balance greater integration with regional and global markets against domestic concerns over market access, employment, revenue and the competitiveness of Sri Lankan businesses.
The creation of the National Trade Negotiation Committee is intended to provide that process with a more structured framework — but its effectiveness will ultimately depend on whether it can turn stakeholder concerns and economic data into a coherent national trade strategy.
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