by Wathsunu Rajinda Jayathilleka
Published on Ceylon Today on 28th March 2024.
Free Trade Agreements (FTAs) have become an integral part of global economic systems as countries seek to establish stronger economic ties and increase their competitiveness in the international market. For a small island nation like Sri Lanka, studying FTA opportunities is crucial not only for economic prosperity but also for enhancing national security prospects. The ongoing discussions surrounding the China-Sri Lanka FTA and the recent signing of the Thailand-Sri Lanka FTA have become a prominent topic of interest. Although FTAs are primarily intended to boost economic growth by increasing trade, investment, and job opportunities, it is crucial to consider their potential impact in enhancing Sri Lanka's national security prospects.
'Open trade is not just good for jobs and growth, it also strengthens our national security... It encourages cooperation and interdependence, making conflict less likely.' Former President of the United States of America, George W. Bush addressed the State of the Union in 2004 (The White House 2004).
FTAs and its implementing
According to the book "Global Political Economy: Understanding the International Economic Order," published by American political scientist Robert Gilpin in 2001, free trade is an economic philosophy in which the primary objective of economic activity is to benefit consumers and enhance global prosperity. This concept aims to increase consumer choices, lower prices, and optimise the utilisation of the world's limited resources in an efficient manner. Free trade is simply known as doing trade without any restrictions on what countries can buy or sell between them. This can be done through excluding tariffs, quotas, paperwork, and bureaucracy. An FTA is similar to a deal between two or more countries to make it easier and cheaper to buy and sell things between them. The main objective of an FTA is to increase exports of a country by reducing its barriers . It is also used to protect the competition in the partnering country while using the interests of the agreement. FTAs also help companies compete in global markets through reduced tariffs and other provisions. Therefore, it generally creates a place without any trade barriers, which leads to the creation of a predictable and transparent market, further leading to an environment in which investors find friendliness.
Sri Lanka’s bandwagoning with FTAs
His Excellency President Ranil Wickramasinghe, in an exclusive interview with the China Media Group (CMG), stated that ‘FTAs are highly beneficial for Sri Lanka’, as they can enhance investment, trade in goods and services, government procurement, telecommunications, and e-commerce. Therefore, it can increase the number of exports of Sri Lanka, which leads to an increase in production and opportunities in the domestic market of Sri Lanka. This can lead to job opportunities and low prices of goods and services. Currently, Sri Lanka has signed four FTAs with India, Pakistan, Singapore, and Thailand while currently negotiating an FTA with China. Sri Lanka is also a member of the South Asian Free Trade Area (SAFTA).
The essence of Sri Lanka’s national security
National security is a crucial element in a country’s functioning. Ensuring the safety and security of a nation and its citizens is the primary objective of the concept of national security. Originally, the focus of this concept was on fortifying against physical threats, such as military attacks. However, at present, as per the former United States Assistant Secretary of State for International Organisation Affairs Kim R. Holmes stated in a 2015 published article that collaborated with the United States Heritage Foundation, “National Security involves a broader range of non-military features such as economic security, energy security, environmental security, and even health, women, and food security”.
Is an FTA a root support for national security?
FTAs help bolster national security prospects. The FTA's relationship with national security has broader complexity. However, if we deeply analyse the synchronising relationship between national security and FTAs, this can be linked to the broader prospects of a state. For instance, in terms of economic security and human security, which are under the umbrella of national security, the following can be boosted through the FTA prospects of job opportunities, which increase human security, as well as trade opportunities, which increase economic security. Furthermore, regional FTAs are useful for enhancing national security because they expand the level of trade between countries, which can increase familiarity and lessen misconceptions between the two countries, based on a research article published by the Korea Institute for National Security in 2005. Further, theUS-based think tank called ‘American Security Project’ in 2014 stated that “Free trade agreements in place with countries around the world will ensure that our military has a constant and secure supply of technology and a diversity of market access will provide a hedge against the risk of crisis in any one country or region”. This shows how FTAs can help national security.
The global outreach of FTAs synchronizing with national security
One such agreement that has benefited national security concerns is the North American Free Trade Agreement (NAFTA). Although the agreement has flowed on migration, transnational crimes, and border security issues, it has widened the regional security corporation within its partners. For instance, “In the wake of 9/11, U.S., Mexican and Canadian policy makers undertook efforts to deepen NAFTA through ‘partnership’ agreements (termed the partnership for Security, Peace and Prosperity or SPP), which were concerned with creating a regional security as a way of diminishing the severity of the border paradox”. Another significant bilateral FTA that has strengthened the national security element of a state is the Korea-US (KORUS) FTA. For instance, the Korea Institute for National Security in 2005 states that “the KORUS FTA was a catalyst to strengthen military, security, and economic alliances between the ROK and the US”. Furthermore, Singapore has established strategic security partnerships with its FTAs to boost regional security.
FTAs: ‘A shot in the arm’ for national security of Sri Lanka
Sri Lanka’s national security apparatus focuses mainly on non-traditional and non-military features. This highlights the importance of utilising FTAs in Sri Lanka’s national security framework. Although there is no current utility framework to use FTAs to benefit the national security apparatus of Sri Lanka, one might question how FTAs are applicable to strengthening the national security framework of Sri Lanka. The answer lies in the implications and utilisation of these FTAs. For instance, securing regional stability and security is a major element that can be utilised through FTAs for Sri Lanka. The FTAs signed by Sri Lanka between India and Pakistan are key agreements depicting Sri Lanka’s commitment to regional stability and regional security. Furthermore, strengthening regional diplomacy through regional economic integration via FTAs such as the SAFTA can ultimately lead to the strengthening of regional security. His Excellency President Ranil Wickramasinghe also ratified Sri Lanka’s entry into the largest free trade block, known as the Regional Comprehensive Economic Partnership (RCEP), which is recognised for enhancing Sri Lanka’s geopolitical security. Furthermore, strengthening security partnerships with key allies through FTAs is another crucial point that can be positively addressed towards the Sri Lankan national security apparatus. However, while there have been intangible outcomes regarding FTAs in strengthening the national security of Sri Lanka, the general public harbours a 'flogging a dead horse' sentiment towards utilising FTAs for national security, as tangible results are lacking. This gap hinders the bridging of our understanding.
However, this can be addressed by a crucial point that is also a major aspect of international trade and national security. This enables access to advanced technology and securing access to military technology through FTAs. To maintain the current swift developments in defence technology that are occurring globally, it is imperative that we have unrestricted access to global markets. However, such military technologies in the market come with high prices and expenses. Sri Lanka, which is currently recovering from an economic collapse, faces some challenges in purchasing such military technologies to boost the national security apparatus. Therefore, with possible budget constraints and requirements, FTAs are a suitable option for gaining military technology without incurring heavy costs. Although FTAs are not directly related to military corporations, there are occasional and reasonable clauses related to military and defence. For example, according to the US government, the US-South Korea FTA includes provisions for joint research and development on defence technologies, without the direct transfer of specific technologies. Further, the government of India and Singapore utilises the India-Singapore Comprehensive Economic Cooperation Agreement for defence and military purposes. Therefore, one crucial element that Sri Lanka can include in its FTAs is joint research on defence and military technologies. In the current context, FTAs in Sri Lanka do not specifically address the transfer of military technology or engage in defence cooperation projects. Rather, these agreements mainly concentrate on economic concerns, such as trade in goods and services, and investment. While the option of expanding trade agreements to encompass more comprehensive partnerships is available, the potential inclusion of military technology research and non-military defence cooperation aspects remains a possibility. Sri Lanka has yet to sign more bilateral FTAs in many states. For instance, the China-Sri Lanka FTA is currently in negotiation which also addresses a strategic partnership within the FTA, which can be taken as a prospect for national security. Therefore, it is important to understand the potential of FTAs to utilise national security as a crucial element for strengthening Sri Lanka’s national security apparatus.
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* Mr. U.G. Wathsunu Rajinda Jayathilleka is an Intern (Research)at the Institute of National Security Studies (INSS), the premier think tank on National Security established and functioning under the Ministry of Defence. The opinion expressed are his own and not necessarily reflective of the institute or the Ministry of Defence.