Sri Lanka and Australia Free Trade Agreement: A Comprehensive Guide
The Sri Lanka Australia Free Trade Agreement (SAFTA) is an accord that was signed between the governments of Sri Lanka and Australia. This agreement is said to provide many benefits to both countries, and it is expected to improve their economic relationship significantly.
In this article, we will explore the details of the SAFTA, its benefits, and its potential impact on the trade industry in both countries.
What is SAFTA?
SAFTA is a bilateral trade agreement between Sri Lanka and Australia that aims to reduce trade barriers, promote economic growth, and increase investment opportunities between the two countries.
The agreement was signed on May 28, 2018, after several rounds of negotiations between the two governments. The agreement covers several areas, including trade in goods, trade in services, investment, intellectual property, and government procurement.
Benefits of SAFTA for Sri Lanka
The SAFTA agreement is expected to bring several benefits to Sri Lanka, including:
1. Access to new markets
Sri Lankan businesses will have access to new markets in Australia, which will help to increase their revenue and expand their operations.
2. Reduced tariffs
Most products exported from Sri Lanka to Australia will be subject to zero tariffs under the SAFTA agreement, which will make them more competitive in the Australian market.
3. Opportunity for investment
The agreement aims to promote investment opportunities between Sri Lanka and Australia, which will help to create jobs and stimulate economic growth.
Benefits of SAFTA for Australia
The SAFTA agreement is also expected to bring several benefits to Australia, including:
1. Greater access to Sri Lanka`s market
Australian businesses will have greater access to Sri Lanka`s market, which will help to increase their revenue and expand their operations.
2. Competitive pricing
Reduced tariffs on products imported from Sri Lanka will make them more affordable for Australian consumers, which may lead to increased demand for Sri Lankan products.
3. Strengthened trade relationship
The SAFTA agreement will help to strengthen the trade relationship between Sri Lanka and Australia, which will provide further opportunities for trade and investment in the future.
Impact of SAFTA on the trade industry
The SAFTA agreement is expected to have a significant impact on the trade industry in both Sri Lanka and Australia. Some key areas of impact include:
1. Increased trade volume
The reduction of trade barriers and tariffs is expected to increase the volume of trade between Sri Lanka and Australia significantly.
2. Boost to the economy
The SAFTA agreement is expected to boost the economies of both countries by increasing trade, promoting investment, and creating new jobs.
3. Increased competition
The SAFTA agreement may increase competition in certain industries, which may lead to the closure of some inefficient businesses. However, this will also create opportunities for new, more efficient businesses to emerge.
Conclusion
The SAFTA agreement is an important milestone in the economic relationship between Sri Lanka and Australia. It is expected to provide significant benefits to both countries by reducing trade barriers, promoting investment, and stimulating economic growth.
As the trade industry continues to evolve in both countries, it will be interesting to see how the SAFTA agreement impacts the industry and what new opportunities emerge as a result.