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Trade facilitation: Breaking down barriers to international trade in Sri Lanka

Sri Lanka still has a lot to achieve if it is to reach the facilitation levels of Singapore which is often cited by policy makers and the private sector to be the country’s benchmark

Sri Lanka has undertaken key initiatives to facilitate trade and transport over the years. Vital agencies in the trading process such as the Sri Lanka Customs and the Sri Lanka Ports Authority have taken measures to facilitate trade through the automation, infrastructure expansions and others.

While acknowledging the initiatives by relevant agencies, Sri Lanka still has a lot to achieve if it is to reach the facilitation levels of Singapore which is often cited by policy makers and the private sector to be the country’s benchmark.

Trade facilitation priorities for Sri Lanka

The Institute of Policy Studies of Sri Lanka (IPS) recently concluded a ‘Trade and Transport Facilitation Audit’ in Sri Lanka. As part of the study, a survey was carried out among 121 stakeholders in the country including key government agencies and the private sector to find out the current status of trade facilitation (TF) in the country and related priorities. This included exporters, importers, shipping lines, freight forwarders, chambers and relevant agencies. Following are some of the TF issues and priorities highlighted in the survey and a stakeholder consultation meeting held recently.

Publication and administration of policies: There is a need for prompt and comprehensive publication of international trade related information. Many stated the availability of information for example in the Customs website to be inadequate to get a comprehensive understanding of the total import/export and clearance processes in Sri Lanka. Information provided in the Sri Lanka Customs website was rated as ‘average’ by a majority of the respondents, with the effectiveness of information on changes in regulation, applicable customs duties, and applicable fees and charges identified to be ‘low’.

Setting up/strengthening enquiry points: While there are enquiry points in different agencies such as the Customs, these are generally perceived to be inefficient and difficult to access. While the existing enquiry points at different institutions could be strengthened, a national enquiry point can function as a coordinating body between the trading community and the relevant regulatory bodies. It can collect requests, direct them to relevant regulatory bodies, compile their responses and inform the requesting party of the responses. Currently, enquiries are often directed at the wrong agency as traders are unaware of the relevant agency to address a specific issue.

Having an institutional mechanism for the implementation of TF measures: There is no agency in the country which takes responsibility to implement TF measures. However, the recently appointed National Trade Facilitation Committee is expected to remove this vacuum and actively take up TF recommendations that have been highlighted by stakeholders over a long period of time in many forums. Some of the high priority areas related to/procedures for imports/exports, identified in the survey are given in Figure 1.

Change of mindset and culture at both Government agencies and the private sector: While recognising the recent TF initiatives undertaken by the relevant authorities such as Sri Lanka Customs, some traders are of the view that they do not function well in practice mainly due to the lack of change in mindset to accept and adapt to new ways of conducting business, etc. Likewise, the need for the private sector to produce correct and required documentation without resorting to irregular payments as a relatively easier means of clearing goods was also highlighted.

(DFT - 28012015)

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