A powerful businessman, who controls a well-diversified conglomerate, is believed to be behind delaying the much-needed anti-dumping regulations, an absolute necessity to protect the local industries against the cheaper import substitutes, specially in light of the forthcoming trade pacts, Mirror Business learns.
Inquiries have already been made as to why the Anti-Dumping Bill, which has received the Cabinet nod, is held up without being presented to parliament for months, as it has not been placed in the order paper yet.
Several companies of the powerful businessman, who is said to be a close associate of the current regime, are believed to be importing large consignments of confectionaries and the Anti-Dumping Bill is set to deliver a considerable blow to his businesses.
The anti-dumping regulations were promised during the coalition government’s 100-day programme. Finance Minister Ravi Karunanayake promised the law being enacted within two to three months at the second Ease of Doing Business Forum held on June 18, 2015. In an earlier instance in February 2006, a piece of legislation called Anti-Dumping And Countervailing Bill was presented to parliament by the Trade, Commerce, Consumer Affairs and Marketing Development Minister, specially to give effect to the agreement on implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) 1994 and the agreement on Subsidies and Countervailing Measures. But for mysterious reasons, it never saw the light of day.
Sri Lankan industries and business chambers particularly have been clamouring for this legislation as the government has shown much interest towards getting into new free trade agreements (FTAs) and a much deeper trade and services pact with neighbouring India.
“This is a very important piece of legislation for our country and it is strange that the government, which tries to fast track the signing of free trade agreements is not giving the same importance to have a safeguard mechanism for the local industry prior to that,” said Lanka Confectionery Manufacturers’ Association (LCMA) Chairperson Shanasz Hakeem.
The LCMA, amongst many industry bodies, has been calling for anti-dumping laws as Sri Lanka has never had laws to prevent dumping of products. This makes Sri Lanka a popular dumping ground for cheaper imports, which not only drain out the much-needed foreign currency, but also make Lankans sick as most of these imports have hazardous substances.
The absence of anti-dumping laws in Sri Lanka has made the playing field uneven and extremely difficult for the local industries as such imports either enter the country at a fraction of the price of a locally manufactured product or below the cost, charged LCMA Secretary Adrian Fonseka.
However, when Sri Lanka exports to other countries, there is extreme vetting of the products before entering their countries and therefore, sometimes it takes months to complete an export consignment.
The situation hits a new low when exporting to India because they do not trust Sri Lanka’s quality standards, Fonseka said, adding that the FTA had made little sense to them as the non-tariff barriers have become an insurmountable worry when entering the Indian market.
The LCMA member companies account for over 90 percent of the country’s confectionery manufacturing exports to over 55 countries.
But Sri Lanka’s policymakers and some sections of the economists do not seem to have realized this and are all out to deepen the markets between the two countries before sorting out the challenges in the existing trade pacts and prior to putting in place the rules and regulations to safeguard the local producers.
“We believe, as a responsible government, this should be attended to before signing the free trade agreements,” Hakeem remarked.