Sri Lanka is in the process of finalizing a national trade policy, which is being developed by the Development Strategies and International Trade Ministry, with the assistance of the Industries and Commerce and Finance Ministries and related state agencies, with inputs from the private sector and other stakeholders.
The purpose of the national trade policy is to guide the process of trade development, which will enable the country to take advantage of international trade, drive inclusive economic growth, ensure equitable benefits for the entire population, achieve sustainable economic growth with shared prosperity and higher standards of living. In the medium term (2016-2020), it aims to contribute to the creation of one million jobs as envisaged by the government.
The national trade policy is being prepared to facilitate the negotiation of the current trade agreements and future trade agreements.
The National Chamber of Exporters (NCE) has circulated to its sectoral heads and other members, the draft of the trade policy, inviting their comments and suggestions to be communicated to the Development Strategies and International Trade Ministry, to facilitate the finalization of the document.
The chamber also conducted an interactive discussion on the draft of the national trade policy with the member exporters of the chamber recently in the conference hall of the chamber to obtain their inputs and suggestions. On the invitation of the chamber, former UN EACAP Asia Pacific Region Trade and Investments Director and Adviser to Development Strategies and International Trade Ministry Dr. Ravi Rathnayake, who led the preparation of the draft trade policy, made a presentation on the trade policy document and thereafter participated in the interactive discussion.
Former Export Development Board (EDB) Director General and NCE Consultant Geoffrey Tillekeratne led the interactive discussion on behalf of the chamber, based on a study of the policy document.
The following viewpoints among others were highlighted at the discussion.
1. Overall the draft contains both policy and strategy instruments. Hence, the need to prepare a condensed document containing the main policy elements, with the more detailed document containing policies and related strategies as an addendum.
2. Condensing the policy instruments to the undernoted important areas:
Policy and Institutional coherence (rationalization).
Improve supply capacity of exporters, particularly small and medium enterprises (SMEs).
Harmonize and simplify trade regulations and procedures.
Reduce trade transaction costs.
Promote Sri Lanka as a low-cost trading and investment destination.
A) Since Sri Lanka does not have a adequate basket of products and capacities to offer the international market place, the importance of emphasizing the nexus between trade policy and investment policy as the major focus of the policy document.
4. Identify the reasons for the inability of Sri Lanka to attract adequate foreign direct investment (FDI) especially of manufactured high-tech products even after the cessation of the civil conflict in 2009 and clearly spell out the investment policy to attract desired FDI, with a single point for approvals of all FDI.
5. Since Sri Lanka currently focuses on trade promotion as opposed to trade development, the need to spell out policies and related resource allocations for trade development activities.
6. Spell out the clear elements of export policy, with linkages to investment policy.
7. Policy emphasis for the rationalization of trade functions and institutional structure, since currently trade-related activities are dispersed among many institutions, leading to procedural bottlenecks and increase of trade costs.
8. Necessity to have in place a set of clear national policies related to trade and to do away with the current ad hoc policy changes, which discourages trade development and investments.
9. Rationalization of import tariffs, para-tariffs and non-tariff measures to provide effective protection to select a domestic industry sectors on a ‘time bound basis’, to afford them the opportunity to improve productivity and compete on a level playing field.
10. In regard to services, given the exclusion of Mode 4, until the regulatory measures to protect domestic interests are in place, spell out the policy related to approvals and procedures in respect of Modes 1-3, based on obtaining coherence of the relevant professional organisations.
Dr. Rathnayake appreciated the valuable view points and inputs provided by the chamber and expressed the desirability of the chamber contributing to a wider public forum on the national