Sri Lanka does not have any FTAs, should clean up tariff schedule: trade expert
ECONOMONYNEXT – Sri Lanka does not have any free trade agreements, as large volumes of products are taxed at high rates through so-called ‘negative lists’ and the country has to clean up the tariff schedule before negotiating deals, an expert said.
“Basically we don’t have FTAs in Sri Lanka but only PTAs (preferential trade areas), because of all the preferential and other tariffs,” Professor Sanath Jayanetti, University of Colombo said.
He was a member of the presidential committee of tariffs.
“I don’t think Sri Lanka wants to go into much liberalization,” Jayanetti told a forum on international trade agreements and policy options for Sri Lanka held by the International Trade Centre and Department of Commerce.
“The reason being when you discuss a free trade agreement, and you say you want 20 percent of the tariffs lines in the tariff schedule in the negative list, that is not a free trade agreement.”
He said that there should be a phasing out of the operations at the very least where the negative list should ideally be very low.
In 2000, Sri Lanka’s tariff schedule was simple and transparent before successive governments introduced the system of para-tariffs to circumvent the revenue losses and to give protection, Jayanetti said.
Indrajit Coomarawamy, Governor of the Central Bank, said the regulator was doing its part to promote free trade.
“On a number of areas, we have started to address this as the Central Bank,” he told the forum.
“On the Central Bank’s side, we’ve adopted a flexible inflation targeting framework, where the exchange rate has to be managed flexibly and it takes out a big anti export bias.
“The para-tariff reform has started which shows that things are moving, however not fast enough,” he said.
(COLOMBO, 10 October 2019)