Eight priority trade and competitiveness reforms for Sri Lanka

Thursday, 17 April 2025 02:55 - - {{hitsCtrl.values.hits}}

CSF releases ‘Policy Note’ on the back of ongoing global trade turmoil

It is now clear that global trade is entering a period of turmoil that is likely to be more acute and challenging than during the Covid-19 pandemic five years ago.

Smaller economies like Sri Lanka that depend on international markets and benefit from a relatively predictable international trading system, will be worst affected. Sri Lanka’s trade and competitiveness reforms perpetually remain an ‘unfinished agenda’.

In this context, Centre for a Smart Future (CSF) – has released a Policy Note outlining eight key trade and competitiveness reforms and strategic initiatives that Sri Lanka must now prioritise, to build resilience and success.

The eight areas are:

1) Doubling down on tariff and para-tariff liberalisation;

2) Designing credible trade adjustment support;

3) Implementing a focused National Export Strategy;

4) Deepening and widening trade partnerships;

5) Enhancing trade negotiation capacity and private-public consultation;

6) Rethinking strategic international engagement;

7) Advancing commercial diplomacy; and

8) Accelerating trade facilitation.

CSF Director and the note’s co-author Anushka Wijesinha noted, “We published this document on the back of the Trump tariffs and their unpredictable roll-out, intensifying trade war between US and China, and turmoil in international trade. While the list may not be exhaustive, it is meant to inform and inspire the renewed efforts by the Government to pursue long-delayed reforms. It is also meant to support private sector associations and trade chambers in their high-level policy advocacy.”

Co-author Senith Abeyanayake noted, “In the document we have briefly discussed each priority reform area or strategic initiative, along with recapping previous efforts, and flagging some salient features and lessons to bear in mind as they are re-prioritised today.”

The insights in the Policy Note are based on CSF research as well as the authors’ own insights and experiences engaging in these policy issues at national level.

The think tank also noted that the support of multilateral institutions and development partners are useful to help anchor, and advance, many of these reforms. However, ‘they must review previous efforts by successive governments and the lessons from technical assistance programs provided over the years, to inform a better design of support this time, and improve chances of success.’

In implementation considerations, CSF has recommended that the Government must draw on the best possible sources of expertise in the country and ensure an inclusive and transparent process for dialogue and consultation. The think tank noted that, ‘advisory committees must better represent the ecosystem of firms in the economy, including ensuring better representation of the spectrum of exporters – not just the large and most obvious firms and their owners. Public officials who were involved in strategic trade and investment efforts in previous years must be brought in from across the civil service, as they possess institutional memory, technical expertise, and practical insights.’

The full Policy Note is available for download at this link – https://www.csf-asia.org/responding-to-global-economic-challenges-eight-priority-trade-and-competitiveness-reforms-for-sri-lanka/

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