Government to undertake large-scale reforms and restructuring under NTP
The Government this week approved the New Trade Policy (NTP) for Sri Lanka to boost its export sector by creating the new opportunities needed for expansion.
The NTP, prepared by a committee of experts, was presented to the Cabinet this week under four main objectives - competitiveness through domestic policy reforms, market access and trade facilitation, macroeconomic balance, policy and institutional coherence and the adjustment of firms and people.
The policy outlines a series of reforms and the introduction of “critical complementary policies” to attain the objectives outlined. The Government is set to carry out a complete trade reform program under the NTP to be implemented “with timing and sequencing to refocus the current distorted and opaque trade regime by rationalising tariffs, para-tariffs and non-tariff barriers, minimising the use of specific tariffs and consolidating tariff lines into three bands.”
With the focus on negotiating trade agreements with all major trading partners, giving priority to India, China and Singapore at the first stage, the NTP also outlines the need to reform trade and investment-related legal and regulatory policies including immigration parallel to the envisaged expansion of trade agreements to ensure domestic services and industries and protect consumer interests while recommending a more liberal regime of trade in services, aiming to attract foreign direct investment.
Noting the lack of growth in the export sector which has managed to add only seven items during the 15-year period from 2000 to 2015 compared to countries such as Vietnam and Thailand which boast of over 70 additions during the same period, NTP stresses the need to develop a national export strategy focusing on selected new export sectors including export-oriented import substitution industries.
Further, the need to develop a National Single Window for facilitation of trade, remove impediments to the conduct of trade and improve trade logistics has also been highlighted with the recommendation to implement the WTO Agreement on Trade Facilitation.
The negative list of the trade liberalisation program and standards and regulations on both exports and imports is also to be reviewed under the NTP.
The final draft of NTP, which was presented by Development Strategies and International Trade Minister Malik Samarawickrama, was prepared by a committee comprising the Economic Advisor to the President Dr. Sarath Rajapathirana, the Advisor to the Committee for International Trade Dr. Ravi Rathnayake and Ministry of Development Strategies and International Trade Consultant K.J. Weerasinghe along with the Secretary and officials of the ministry. The presented draft was also approved by the Committee for International Trade.