Cutting domestic trade barriers could cut Sri Lanka export costs by 25-pct
ECONOMYNEXT – Eliminating domestic barriers to trade could reduce costs by as much as 25-30 percent, according to a study of difficulties faced by Sri Lankan agriculture exporters by Verité Research, a private think-tank.
“Findings reveal that domestic barriers to trade significantly undermine the export capacity and competitiveness of Sri Lankan exports,” said the study titled ‘Sri Lanka’s Domestic Barriers to Trade: Case Studies of Agricultural Exports’. “Hence, addressing them is important to unleash the country’s export potential.”
While free trade deals Sri Lanka is pursing with other countries could address external barriers that Sri Lankan exporters face in the importing country, trade barriers are found not only at the border of the importing country, but also at the border of the exporting country, the study said.
“Interviews with exporters revealed that improving the efficiency of border procedures could cut the cost of products by as much as 25-30,” it said.
The study identifies trade barriers the exporters face when importing inputs, like seed and fertilizer, and exporting the final output.
Verité Research has divided these trade barriers into three broad categories: regulatory barriers, procedural barriers and informational barriers. “There is much that can be done at home to realise the untapped potential of agricultural exports,” the study said.
The study revealed many of the barriers that currently exist to be symptomatic of a deeper lack of communication between the three major players in the trade-related policymaking space.
These are the policymakers who make regulations, regulatory agencies, who are unaware of the barriers created by procedures or are unwilling to address them due to the perks and privileges the existing system offers, and private sector traders, who often resort to private solutions to address the barriers.
“Many of the barriers described can be easily esolved, as demonstrated by the experience of other countries,” Verité Research said. “However, arriving at long-term, sustainable solutions requires a willingness of the government to recognise the importance of domestic barriers and working towards eliminating them. It also requires the persistence of the private sector in holding the regulatory agencies involved in trade accountable in delivering such solutions.”
(COLOMBO, June 13, 2017)