Weerasinghe said another point of contention was that China wanted zero tariffs on 90 per cent of goods the two countries sold to each other as soon as an agreement was signed while Colombo would rather it started with zero tariffs on only half of the products concerned and expanded gradually over 20 years.
China has been pushing for free trade pacts with countries in the region and last year sealed an agreement with the Maldives that drew criticism from opposition political groups in the tropical islands’ nation. They said it had been rushed through parliament with less than an hour of debate.
Sri Lanka has previously said it wanted more time to negotiate the free trade deal with China as it is concerned about the economic impact of a rushed deal on its economy.
Sri Lanka imported US$4.2 billion worth of Chinese goods in 2016, mostly raw materials for garments, machines and electronics, metals, transport equipment and chemicals. Its exports to the world’s second largest economy were just US$211 million the same year, which included textiles, tea and vegetables, footwear and rubber.
The 2017 figures for China trade have still not been released by the Sri Lankan authorities.
The trade deficit with China accounted for nearly half of the nation’s total deficit in 2016, adding pressure on the country’s current account deficit, central bank data showed.
Sri Lanka’s foreign debt rose nearly 17 per cent to 4.72 trillion rupees (US$30 billion) last year, a fifth of that coming from loans from China to finance the massive construction programme across the island.
Colombo is separately negotiating a trade pact with India, but that is also moving slowly because Sri Lankan businesses fear they will face competition from a flood of cheap goods made by Indian firms.