Malaysia Sri Lanka Free Trade Agreement

The Malaysia Sri Lanka Free Trade Agreement: What you need to know

The Malaysia Sri Lanka Free Trade Agreement (MSFTA) was signed on December 2020 and has been in effect since May 1, 2021. This agreement is expected to strengthen bilateral trade between the two countries by eliminating tariffs and other trade barriers.

What does the agreement cover?

The agreement covers a wide range of goods and services, including textiles, electronics, machinery, and food products. It also includes provisions on intellectual property rights, dispute settlement, and technical barriers to trade.

What are the benefits for Malaysia?

The MSFTA provides a significant boost to Malaysia`s exports to Sri Lanka, which accounted for $331.2 million in 2019. As tariffs are eliminated, Malaysian businesses will have easier access to the Sri Lankan market, which has a population of over 21 million.

The agreement also provides opportunities for Malaysian businesses to invest in Sri Lanka`s infrastructure and development projects. This could lead to increased economic growth and job creation for both countries.

What are the benefits for Sri Lanka?

Sri Lanka will also benefit from the MSFTA, as it will have access to Malaysian goods and services at lower costs. This will lead to increased competition and potentially lower prices for Sri Lankan consumers.

The agreement also provides opportunities for Sri Lankan businesses to export to Malaysia, which has a population of over 31 million. This could lead to increased economic growth and job creation for Sri Lanka.

What are the potential challenges?

Despite the potential benefits, there are also potential challenges that need to be addressed. For example, there may be concerns about the impact of increased competition on local industries, especially in Sri Lanka.

There may also be concerns about the environmental and social impacts of increased trade and investment. Both countries will need to work together to ensure that the agreement promotes sustainable development and protects the rights of workers and communities.

Conclusion

The Malaysia Sri Lanka Free Trade Agreement is a significant step forward in strengthening bilateral trade between the two countries. While there may be challenges, the agreement provides opportunities for increased economic growth, job creation, and improved access to goods and services for both Malaysia and Sri Lanka. As the agreement is implemented, it will be important for both countries to work together to ensure that it promotes sustainable development and protects the rights of workers and communities.