Global Alliance presents SL fresh opportunity to cut red tape in cross-border trading
The Global Alliance for Trade Facilitation (GATF) yesterday presented Sri Lanka with a fresh opening to uplift its processes on trading across borders but implied a turnaround must be witnessed in the near future if it is to capitalize on the “once-in-a-lifetime opportunity”.
According to the GATF, the Trade Facilitation Agreement (TFA) provides a vital tool for Sri Lanka’s ambition to become a regional logistics hub.
“The TFA has the potential to greatly enhance the competitiveness of local businesses in the global markets and help cut costs for local consumers.
This agenda is worth your time and investment and calls for highest political will. It is a once-in-a-lifetime opportunity, so make the best use of it,” said GATF Vice President Donia Hammami to a fully-packed audience at the forum, ‘Global Alliance for Trade Facilitation: Making Cross-border Trade Easier for Sri Lankan Business’, held in Colombo yesterday.
The GTFA is a public-private partnership (PPP) for trade-led growth that aims at improving conditions between border authorities, making rules for trading goods more transparent and taking advantage of new technologies in customs procedures. It is said the implementation of the pact would have positive and sustainable effects on the government revenue collection and reducing corruption at borders. The agreement entered into force in February 2017 when twothirds of the World Trade Organisation (WTO) members ratified the same, making it a binding pact. Sri Lanka was the 81st country to ratify the TFA.
It was elaborated that the implementation of the TFA in Sri Lanka would be a “win-win deal” for businesses, the government and its residents in general.
A positive for businesses of all sizes, especially small and medium enterprises (SMES), through enhanced competitiveness and new opportunities, for the government due to higher economic growth, jobs and revenue that would follow and for the citizens due to the creation of new jobs and availability of cheaper goods.
However, it was pointed out that the successful implementation of the “common-sense package” that aims to tackle all bottlenecks in cross-border trading depends on a number of key factors essential to take into account during policy formation. The GATF asserted greater emphasis must be given on finding the right balance between the customs control and facilitating the import, export and transit of goods. Whilst further work was identified as necessary in reinforcing cooperation between different regulatory agencies, it was stressed it is mandatory to include the private sector in the equation throughout the implementation.
“It is important to not work in isolation in the regard. The private sector must be included in each stage of the implementation process as they have an acute understanding of trade barriers which they experience firsthand. What better way to find out issues in the system!” said Hammami.
With the agreement being one with “teeth”, according to the visiting head, Sri Lanka was urged to act fast in setting ambitious but realistic targets. Failing to do so would result in the island nation not being able to progress further and reap the benefits stemming from the agreement. Sri Lanka has already formally notified the WTO of its Category A commitments but its B and C commitments are yet to be submitted to the agency. Although Category A was to be implemented upon entry into force in February 2017, a grace period of two years is applicable, during which the countries cannot be subject to dispute resolution. The GATF states that the implementation of the pact could reduce the WTO members’ trade by an average of 14.3 percent.
Hammami pointed out that the TFA will be of benefit to all members of the WTO since the costs of implementing the agreement are likely to be far less than the expected benefits from improving the flow of goods across borders.
The TFA is expected to reduce the total trade costs by more than 14 percent for low-income countries, more than 15 percent for lower-middle-income countries and more than 13 percent for upper-middle-income countries.