<b>EXCLUSIVE - Indo- Pak Rivalry brought Sinha to Colombo</b>

T.Sabaratnam

Colombo July 13: (News Analysis) Why did India’s new foreign minister Yashwant Sinha rush to Colombo within a week after he took up his new post? Is it to reiterate the well known, oft repeated Indian position of “full support for peace process” or to repeat its well orchestrated campaign against global terrorism?

Analysts here think otherwise. They say that Pakistan President Pervez Musharraf’s July 29-30 visit and the talk of signing of the Sri Lanka- Pakistan free-trade agreement (FTA) was the provocation.

Musharraf and Sri Lankan Prime Minister Ranil Wickremesinghe are expected to sign the FTA. “Pakistan is seriously interested in promoting trade with Sri Lanka,” Pakistan's Minister for Commerce, Industries and Production Abdul Razak Dawood said.

Dawood was in Colombo Tuesday to negotiate the FTA with his counterpart Ravi Karunanayake. He said the FTA would be in place in September.

Sri Lanka has a free-trade agreement with India, which the trade chambers and commerce department admit that it was moving very slow.

Dawood invited on Wednesday, Sri Lankan investors to make mutually beneficial investments in Pakistan. He urged them to make use of Pakistani expertise by setting up joint ventures for the production of engineering goods, auto parts and textiles.

Pakistan Commerce Minister said there was a great potential to substantially expand the volume of bilateral trade, which currently stands at US$130 million.

"The main thrust of President Pervez Musharraf’s visit will be on improving economic relations with the two countries," said an official in the Sri Lankan Ministry of Foreign Affairs.

The thrust of Sinha’s discussion with President Kumaratunga and Prime Minister Ranil Wickremesinghe was also on bilateral economic relations.

“The economic content came in for special focus during intensive parleys,” the Foreign Ministry official said.

India, in recent weeks, entered into a series of agreements with Sri Lanka, to get it involved in a variety of economic activities. It took over ten of the 100 oil storage tanks in Trincomalee, as a preliminary step to enter the distribution of petroleum products. It is also leasing 100 acres in Trincomalee to set up an Industrial Development Zone.

During Thursday’s talks, India agreed to further soften terms of the line of credit of $ 100 million, already extended to Sri Lanka, as the two countries decided to tap the vast potential that exists, for enlarging economic cooperation, beyond the India- Lanka Free Trade Agreement (FTA).

"The two sides shared the vision about the vast potential that exists for enlarging our economic cooperation beyond the FTA," the joint statement issued at the conclusion of Sinha’s visit said.

The joint statement issued by India's High Commission in Colombo, said New Delhi was committed, ``to the unity, sovereignty and territorial integrity of Sri Lanka,'' and expressed India’s hope that, peace is restored in Sri Lanka, ``through a peaceful negotiated settlement, that meets the just aspirations of all elements of Sri Lankan society.''

Sinha told the press conference that, the India’s request for the extradition of the LTTE Leader Velupillai Prabakaran, would in no way hinder the current peace process.

He also rejected a request by PLOTE leader Dharmalingam Sidhtharthan and EPDP boss Douglas Devananda that, India play an active role in the peace process. He rejected their argument that, India is morally bound to play such a role saying their past experience precluded it.