* Says catalyst for bolstering intra-regional trade, now at a dismal 5%
*Discloses that 70% of the Indo- Lanka trade is outside FTA
July 15, 2012, 12:00 pm
By Ravi Ladduwahetty
External Affairs Minister Prof. G.L. Peiris on Friday implored the SAARC Chamber of Commerce to help remove non tariff barriers within the SAARC region which, he said, would bolster trade within the region, which now stands at a microscopic 5%.
He was addressing a one day seminar themed: "Trade facilitation in South Asia: Addressing barriers to foster trade chain" at Hotel Taj Samudra. It was organised by the SAARC Chamber of Commerce and Industry in collaboration with the Federation of Chambers of Commerce and Industry of Sri Lanka and in partnership with the Reiedrich Naumann Stiftung Foundation.
* Says catalyst for bolstering intra-regional trade, now at a dismal 5%
*Discloses that 70% of the Indo- Lanka trade is outside FTA
July 15, 2012, 12:00 pm
By Ravi Ladduwahetty
External Affairs Minister Prof. G.L. Peiris on Friday implored the SAARC Chamber of Commerce to help remove non tariff barriers within the SAARC region which, he said, would bolster trade within the region, which now stands at a microscopic 5%.
He was addressing a one day seminar themed: "Trade facilitation in South Asia: Addressing barriers to foster trade chain" at Hotel Taj Samudra. It was organised by the SAARC Chamber of Commerce and Industry in collaboration with the Federation of Chambers of Commerce and Industry of Sri Lanka and in partnership with the Reiedrich Naumann Stiftung Foundation.
Prof. Peiris also attributed the barriers as high customs duties, total lack of uniformity on customs classifications, a plethora of conflicting practices in licensing, registration and health requirements, laboratories for testing, quality standards which today were very cumbersome, the lack of uniformity of the banking procedures, transport, cargo clearance and boundaries to the dismal trade performance within the region.
The cumulative effect of all these impediments were substantial and constitutes the major disincentive to increasing the volumes of trade within the SAARC region, he said.
He said that one of the solutions was to get a single clearance certificate, with harmonization, automation, the use of electronic data to break these barriers. The removal of these non tariff barriers were of paramount importance of making a practical dent in the situation that we are bleeding with today.
We need to ascertain the practical approaches that are available to mitigate the issues and which lend themselves to extenuation of this problems. He also said that it was incumbent upon the SAARC Chamber as the best people to address the problems and that the governments were driven by that impetus.
Prof. Peiris said that it was a matter for regret that trade within the SAARC region was a mere 5% of total trade in contrast to the European Union which accounted for 55%, the NAFTA region, ( US, Canada and Mexico) it is 52%, the Asia Pacific region( APRC) it is 32% and ASEAN which is closer to us is, 22%.
Continuing, Prof. Peiris said:" As we survey the global context, we are conscious of the fact that each of the regions are taking strong steps to promote intra-regional trade among themselves and African countries to which Sri Lanka once had a stranglehold in exports, are drawing their own regional agreements which have negative impacts in Sri Lanka’s tea exports that we used to have.
It is also a matter of regret that the intra-regional trade is far below that what it ought to be. If we are to address a problem, we have to realise the gravity of the problem. If we are complacent, there will not be a solution. There were those who believed that this was inevitable, which he said, was a defeatist attitude and the rationale of the arguments those were presented in this regard were also unacceptable. What they say is that what is to be exported from Sri Lanka to rest of the region, is also available in those countries as well.
Expressing some views, which he said were his personal, and not necessarily those of the government of Sri Lanka, he proposed that common packages could be drafted in the arena of tourism which will enable the Western tourists to savour the premium beaches of Maldives, along with the jungles and wild life, cultural attractions of the ancient cities and others along with the Himalayas in India. Similarly, he said that Nepal’s hydropower resources could be developed so that it could be exported to India and Sri Lanka. There are many things that could be done to increase the dismal 5% intra-regional trade that one could not be complacent about, he said.
He also said that trade between India and Sri Lanka which was at a US $ 675 million when the Indo- Lanka Free Trade Agreement was signed in 1998, had zoomed in excess of US$ 6800 million now, a 750% increase between the two periods, but ironically, 70% of the trade between the two countries, is taking place outside the FTA.
He said : "I am happy that you are bringing your thoughts on a topic of undoubtedly importance- trade facilitation within the SAARC region, a matter that goes to the heart of the economic wellbeing of the region. I am also happy that you are bringing to bear your collective thoughts on practical strategies we need at this time to enhance volumes of trade within the SAARC region.
He also stressed on the importance to access to up to date information which had to be accurately available, regulatory procedures and the movement of people, goods and services across national frontiers.
While also stressing on that SAARC was not merely a political tool which led to government to government contact, he said that it was more a tool for people to people contact, which he said, was a significant achievements of the regional grouping.
He also said that trade was the focal point in bringing countries and groupings together and added that it was trade which brought political and monetary union within Europe." Trade is non- controversial and the usual strategy between conflicting nations is to engage in areas bereft of controversy where it is the first step to dealing with seemingly intractable problems, he added.
Source: The Island
