National Policy on Trade: Need of the hour

24 August 2016 12:00 am - 1     - {{hitsCtrl.values.hits}}


The Government Medical Officers’ Association (GMOA), a body vociferously critical of the ETCA, says a proper national policy on trading should be evolved before signing any bilateral agreement for trade with other countries. GMOA President Dr. Anuruddha Padeniya, in an interview with the  Dailymirror  on the subject said the Government appeared to be trying to open up the service sector, and it would have far reaching effects on economy.

Q As a medical practitioner, you are opposed to the proposed Economic and Technology Cooperation Agreement (ETCA) with India. What are the reasons for it?
I think the primary issue here is that it is a trade agreement. Trading is nothing new to Sri Lanka. But, trading can be done individually, as organisations. Whatever the level you do trade at, nobody will do in an ad hoc manner. A studied approach has to be followed for whatever trading, even charity. We are proposing to the Government. We have analysed the current situation. We have realised the fact that this is being done in an ad hoc manner. It is not done in a studied manner. There is no transparency in the process. Nobody is accountable for the final outcome. If there are positive results, people will at least take the credit. At the moment, we have experienced negative impacts in terms of trading with that country.

Q Then, what do you propose as medical practitioners to correct the situation?
What we have proposed is to undertake a studied approach. It has to be governed by the basic principles of doing businesses. In that context, we should analyse the current situation. We should have our objectives in the correct places. We should take accountability of the activities done. Then, we should proceed.

Q What is your overall opinion on trading with India as one of the largest economies in the world?
The ETCA is the evolution of the Indo-Lanka Trade Agreements. I am not anti-Indian. The current Indian trading representatives have not maintained honesty. 
There is a trust deficit in the whole exercise. They had the added advantage because their Sri Lankan counterparts dealt with the issue without any study as such. It caused negative gains for Sri Lanka. They have acted in a manner that benefitted India at the end. Therefore, the history of evolving trade agreements goes back to 1998. There are various modes of trade arrangements- bilateral agreements and multilateral agreements. What is currently demanded is a bilateral agreement.

Trading can be done in goods and services. So, the Indian authorities were opportunistic enough to sign a trade pact in 1998 on goods. Actual trading in goods started in 2000. It has been going on for the last 16 years. Over these years, the trade balance has grown heavily in favour of India. It is even escalating. Despite that, we have run the agreement without any review.

In 2003, there was only one review. It recommended certain changes to the existing agreement. Yet, they were disregarded. Someone might say the loss was due to domestic issues. It is incorrect. During the past 15 years, Sri Lanka’s exports to other countries have plummeted but not to India. We are not economists. But, as laymen, we are not convinced that signing a bilateral agreement does any good in this manner. 
As I mentioned, there are two types of trading- goods and services. Having had a bad experience, India, with the support of India-leaning Sri Lankans, have resorted to expand the goods trading to service trading in terms of the ETCA. 

They brought it under various names. Earlier, it was called CEPA. Whatever it is, the context is meant to expand goods trading to service trading. We proposed to pursue a studied approach. It was revealed to the media and the politicians. Then, we wrote to the President and Development Strategies and International Trade Minister Malik Samarawickrama. It was not acknowledged. As a result, we published a booklet by spelling out what we were advocating.

Q What have you highlighted in it?
In that context, we have outlined five concepts. The first is to analyse the current situation. The current situation is to analyse the existing trade agreements for a review process. It is not rocket science. It is simple. Most businessmen do it on a regular basis. Even the GMOA gets audit reports once a year. Ours is an organisation not doing business. Running international trade for 15 years without implementing any recommendation is grossly unacceptable.

Next, we have requested these so called economists and politicians to study the trade agreements of other countries. That is all under the first step. The Colombo University academics have analysed why the trade balance was escalating negatively for Sri Lanka. We have noted various attempts made by Sri Lankan exporters and how they were discouraged, or failed to achieve success at the hands of Indian authorities. The Indian authorities, both at Central and State levels, have acted in a manner that discouraged Sri Lankan exporters. That was why, our exports have dropped. In the review process, we have analysed two aspects. One is to have economic benefits. The second thing is that you have to do trading to get economic benefits along with lateral benefits. That is to learn the know-how about trading and promoting products.

According to our analysis, during the 15 years, we are concerned whether we learnt of anything in this respect. The only area we have improved in is the export of Karunka (Dry Arecanuts). These Karunka exports also do not originate from Sri Lanka. India has been importing Karunka from other Asian countries. What they have really done is that they have channelled their Karunka imports from Indonesia through Sri Lanka. 

Value addition is done here and exported. We have got fooled in different ways. We are losers. Every country in the world, apart from a very few, has a national policy on trade. India has it. We do not have. When we propose it, a draft of the ETCA was given. 
ETCA has to be implemented without violating the national policy framework of either country. Everybody accepts the necessity of a national policy on international trading. Sri Lanka has been doing business without a national policy.

Q What is your opinion on service trading?
We made inquiries from the Director- Services of the World Trade Organisation (WTO) when he visited Sri Lanka for a two-day workshop. He said it was obvious that a country should have a national policy on trading. 

People who talk about good governance talk against a policy. They talk in favour of ad hoc decisions.

We initiated an email communication with the Director. He conveyed us the WTO principles how to develop a national policy. The world agrees on six steps- Having a mandate, Independence, the Interfaith, Accountability, Transparency and Human Resources. 

When we stressed the necessity of a national policy, people like Prof. Rohan Samarajiva, complained we advocated a delaying tactic.

The President, the Subject Minister and all other concerned were agreeable to a national policy on trading, when put forward the idea. Now, they know they could not mislead beyond a point. They started developing a national policy. For it, a committee was appointed, comprising the very same people responsible for trade damages to Sri Lanka.

We clearly say in our booklet how a policy should be developed. Six steps are to be followed in the process. First, the President, in terms of Article 36 of the Constitution, should appoint a Presidential Commission to develop a policy like the appointment of the National Salaries and Cadres Review Commission. 

Then, an advertisement should be put up in newspapers calling for individuals and organisations to submit their views on the matter at hand. The policy should be developed accordingly and put in the public domain. 
It should look after the basic aspects such as national security of the country, public safety, safety of exporters and the impact of importation. Everything should be studied. Afterwards, Parliamentary approval should be obtained.

Yet, instead of developing a proper policy, they, the Government, are involved in a bogus exercise. Interestingly, they have not yet appointed an Independent Commission. But, they have drafted a document, even putting the number of pages to be in the proposed national policy. The draft is in our hands. They say a national policy introduction, basic framework, objectives and other issues.

How can the Government talk about the number of pages even before appointing a Commission? In the Sri Lankan Parliament, we do not have public representatives. In Parliament, we find party ambassadors. Any Parliamentarian talks on behalf of his party, not on behalf of people. Only Independent Commissions have to decide on national policies. Parliament can discuss and approve them.
The classic example is the National Wages Commission. It worked out recommendations to be approved by the Cabinet and Parliament.
We have presented in the minutest details how such a policy should be developed.

Q The government says the service sector will not be covered under the ETCA. What are your views?
Then, what is the purpose of their attempts to strike this agreement? An agreement for goods trading already exists. That is the Free Trade Agreement. Why are you expanding it? That is for opening up the service sector. What is left is the service sector. They say they do not open up the job market. At the same time, they say they will open the Information Technology sector and marine sectors.

Q How do you compare and contrast service trading with goods trading?
The service sector has four components. It is much more complicated than trading in goods. When you trade any goods, it is tangible. Service trading is highly complicated. It has four modes. One is cross-border supply. You are writing an article for the Daily Mirror. You are here. But, you can be elsewhere and then do the same interview over the phone. It is cross- border supply. 

One can even get medical service even crossing the border. If you have a radiology report, you can send it outside the country using where the technology is available and get medical advice. Suppose, you are building a condominium, the entire commercial law can be outsourced to an Indian company. It will prepare a document for Sri Lankan lawyers only to sign. In the legal context, 80 percent of their activities do not transpire through courts. It includes areas such as Notarial work and all. Sri Lankan lawyers will not allow non Sri Lankan lawyers to appear before court as counsel. It is only a small proportion of legal work. Recently, there was one condominium coming up. The legal consultative activities cost about Rs. 30 million. It is paper work that can be outsourced without crossing the border.

The mode two is the service trade involving crossing the border. For care, you go abroad. For a kidney transplant, patients go to India. The mode three is for commercial purposes. It is like the establishment of a commercial venture like the Apollo Hospital. It was done without a bilateral agreement. Since we are a party to the WTO agreement, we can do it even without an agreement. It was done under the BoI. 

Yet, it is within our jurisdiction. If you sign a bilateral agreement, then the Sri Lankan judiciary will not be able to overrule anything. Such cases will be referred to arbitration as the judiciaries of both the countries are not involved. Arbitration is very complex due to technical and legal reasons and expenses involved. During arbitration, the strong candidate wins. It is not a win- win situation.

The mode four is the movement of natural persons. That natural person has the ability to work as the citizen of that country concerned apart without voting rights.
Service trading driven without a studied approach ends up with impact not only in the economic sphere, but also in social, cultural, health and environmental area. Service trading has to be done delicately. As medical practitioners, we not only address the impact on our sector. We have a role to play regarding the health impact of this so-called trade agreement. If the country opens up for the import of unhealthy food, it will have a direct bearing on the health of people.

This is how other countries do trading. When you get a doctor down here, his qualifications have a direct impact on public health.
Before signing service trading agreement, our house should be put in order. Sri Lanka Medical Council governs and regulates the profession in our country. It accredits and monitors medical practitioners. Today, that ordinance is 90 years old with a few amendments.

People claim Indian doctors are very good. But, one Ministry Secretary of that country says the standard of many of their doctors are just above that of quacks. 
In India, you have the high end. They send spacecraft. At the same time, there are people who have not seen a vehicle on the road. 

  Comments - 1

  • Top Hat Wednesday, 24 August 2016 08:28 AM

    Why don't they form a political party and take to politics!!

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