South Asia’s private sector unites to fast-track trade facilitation

By Cheranka Mendis

Sri Lanka is truly emerging as the ‘Pearl of the Indian Ocean’ with 5% consistent growth over the past few years backed by a boom of tourism and an increase in the value-added sector, SAARC CCI President Vikramjit Singh Sahney said yesterday.

He was speaking at the inaugural session of the seminar on ‘Trade Facilitation in South Asia: Addressing Barriers to Foster Trade Chain’ organised by the SAARC Chamber of Commerce and Industry. “It really is a ‘Pearl of the Indian Ocean’ and a part of the historic Silk Route,” he added.

Even though trade facilitation in the South Asian region is the lowest in the world with intra trade recording just 5% of the total quantum of trade within the region, which in comparison with trade between other regions is dismal – the EU accounts for 55%, North American Free Trade Agreement (NAFTA) which includes USA, Canada and Mexico accounts for 52%, Asia Pacific Regional Centre (APRC) 32% and Association of South East Asia Nation (ASEAN) 22% – the region has great potential to iron out the barriers and move forward.

Noting that a powerful delegation from all SARRC countries representing all sectors which includes the likes of low-cost housing, tourism, entrepreneurs in oil and gas, automobiles, garments, etc., is in Sri Lanka, Singh assured that the brainstorming session over the weekend at a resort in Kandy would “unleash the potential of the great region”.

Expressing that South Asia ranks the last in terms of road density and rail lines, Singh stated that the SAARC CCI was committed to forming a highly-conducive SAARC regional multi model transport signatory system. “We also need bilateral and multilateral agreements which allow vehicles of one country to collect delivery cargo in other countries.”

He stated that within the likes of India and Nepal, India and Bangladesh and India and Pakistan, projection time even across borders is very high, which businessmen cannot afford. Construction of intercity expressways would surely allow high speed travel and better connectivity through airlines, he said.

The region however has not been able to address the issues of simplification and harmonisation of trade procedures.

Backing the FTA between Sri Lanka and India, Singh also acknowledged that a “big India show,” the India-Sri Lanka CEO Forum, is scheduled to be held in early August, where the Indian Trade and Commerce Minister will be in the country, further showcasing India’s commitment to Sri Lanka and to the SAARC region in particular.

He also stated that the region must unite in areas in which most countries are strong, such as cricket: “Why not have a strong South Asian cricket team?” he questioned from the audience and was met by applauses.

“I think the main impediment that remains is the issue of the SAARC visa sticker,” Singh said. “With great difficulty we issued the SAARC visa sticker for 100 businessmen for a one-year period. This visa sticker should be issued free to at least 500 to 5,000 bona fide businessmen to travel freely across the region.”

Time has come for every South Asian nation to work together to bring cooperation and trade facilitation among the region for better economic prosperity, he said.

Minister of External Affairs Prof. G.L. Peiris, who also attended the event, noted that practical strategies must be found to enhance volumes of trade as trade facilitation is a matter that goes into the heart of the economic wellbeing of the nations.

Listing out some of the key barriers, Peiris noted that the high Customs duty, total lack of consistency, uniformity regard to custom facilitation and the plethora of conflicting practices with regard to licensing, registration, health requirements, technical requirements and laboratories for testing for quality standards all must be simplified.

The lack of uniformity with regard to banking procedures and practical as well as problems connected to transport such as cargo clearance and boundaries must also be addressed, he said. “Cumulative impact of all impediments is substantial and constitutes today in major disincentives to not increase volume.”

A single clear certificate must be arrived at and with the use of modern technology, barriers must be broken to achieve harmonisation in automation, transmission of electronic data, etc. “This cannot be done only with formal negotiations between Governments; SAARC is also about people-to-people interactions, which is important in moving forward,” Peiris said.