Seminar on ‘Trade Facilitation in South Asia’ focuses simplification towards better intraregional tr

•  Trade is central in upgrading socioeconomic setups, says Prof. G.L. Peiris

Text by Harsha Udayakantha Peiris

A seminar on ‘Trade Facilitation in South Asia’ to address the barriers to foster the trade chain, organised by the SAARC Chamber of Commerce and Industry in collaboration with the Federation of Commerce and Industry of Sri Lanka in partnership with Friedrich Naumann Stiftung was held on 13 July 2012 at Taj Samudra Hotel – Colombo.

The seminar mainly focused on the particular areas trade facilitation was looking at and identifying specific barriers, developments and aspects to be attended in trade facilitation in the South Asian region.

Objectives

Procedural barriers have been identified as serious bottlenecks, hindering smooth trade flow in the region of South Asia. Due to various flows in commercial, transport, regulatory and financial procedures, the trade facilitation mechanism in the region has been negatively affected, which has led towards involvement of more procedures as compared with any regional trade bloc in the globe.

Infrastructure and logistics have become very important segments of any trade facilitation mechanism, which unfortunately are underdeveloped areas in South Asia. Despite having all sorts of communication networks, South Asia is considered as the least connected region in the world.

The various studies necessitate for improving infrastructure have estimated that South Asian countries altogether had to spent US $ 470 billion from 2008 to 2012, though only 20% has been disbursed so far and therefore, requires the allocation for enormous financial resources.

In connection to these issues the seminar was aimed at seeking solutions through deliberations amongst businessmen and the academia and to work out several important measures, suggesting policy makers that how procedural flows can be contained and documentation requirement is reduced through simplification of procedures to foster process in the region, deliberating upon the issues at length between the public and private sector representatives, assessing the need for resources allocation and improving logistics and transport efficiency in the region.

Professional insights

Minister of External Affairs Prof. G.L. Peiris, the Chief Guest at the event, expressing views at the inaugural address of the session stated that trade is the central task in upgrading socioeconomic setups and the strong steps which are being taken to strengthen intraregional trade should be looked into, as a vital aspect.

“Intra-regional trade has come to the for-front of the global trade development trends and it is high time Sri Lanka should take that as a prime consideration. If we do not acknowledge that there is a problem to be properly addressed, we cannot achieve the target progressively. SAARC has 1,500 million people and within the region, only a mere five per cent of trade currently shows any progressive boom. Therefore, intra-SAARC trade is very low compared to the other trade quantum in the global trade regions such as the European Union,” he said.

The Minister further stated that the challenge was to examine the synergies and the complementarities in all aspects of intra-trade activities in the region.

“For example, if we compare the tourism sector in Sri Lanka with Maldives, a vivid diversity could be viewed in developing the trade in partnership with closer competitors. And here, when one engages with high end tourism with dedicated islands and resorts, another can competitively implement the thick vegetations, mountains that could be explored, historical civilisations and tranquil lifestyles in promoting the trade at the other destination,” he added.

The Minister also said that 70% of the trade between India and Sri Lanka takes place outside the designated parameters and a single clearance certificate, harmonisation, automation, the use of electronic data and the full use of technology to break down these barriers should be identified as the most practical measures, if we are to deal with these issues.

“There should be a collective effort on the part by all of us. We should better look into find out the approaches to tackle these problems and the business community has a major role in this regard to talk to respective governments to eliminating these barriers. There also exist issues that we must resolve with regard to facilitating the movement of business people, goods and services across the region. Regulatory procedures that could be immediately and accurately reached should be introduced and the SAARC should not be considered a mere Government to Government contact but a people to people contact. Intra-trade between the SAARC region therefore, should be enhanced and the most fruitful way to overcome all such barriers in this regard is to take collective action to harmonise and simplify all trade facilitation aspects,” the Minister added.

Dr. Prabir De – Fellow Research and Information Services (RIS), New Delhi, India expressing views on simplification of procedures to facilitate regional trade stated that harmonisation of trade activities and simplification of documentary requirements are key needs to properly implement a better trade facilitation process. He pointed out that challenges should be identified and better analysis should be carried out to manage the process.

“On top we have supply chain complexities. Where the Governments are involved, we see gaps to be fulfilled. The private sector has a strong role to play. We are pleased to see that several Government sectors are engaged in strong efforts to facilitate the process but a full and inclusive representation of the private sector in trade facilitation initiatives is also vital and essential,” he said.

Research Assistant of Institute of Policy Studies (IPS) of Sri Lanka Ashani Abeysekara at a special presentation at the seminar, on improving trade processes and procedures in Sri Lanka stated that the trade community must simplify trade procedures to boost efficiency. She said that simple trade procedures would make larger trade volumes and Sri Lanka as a small island economy where the domestic demand is low but has a crucial growth in external demand, simplifying trade facilitation is crucial.

“Although Sri Lanka performs well in the South Asian region in the total Asian arena the country is lagging behind in some key areas of trade facilitation,” she added.

Documentation preparation that takes most time, followed by transport and handling issues, basic trade facilitation measures that are not always in place, procedures practiced between private parties which own a greater portion of the overall trade process, different countries’ requirement for different documents and information for the same product to be exported and the crucial requirement to harmonise procedures and documentary as well as the importance of confirmation of port logistics were also highlighted as key areas for thorough consideration.

Abeysekara also pointed out that 75% of CUSDECs are still submitted manually and poor utilisation of automated systems, poor clearing facilities and delays in documentation should further be properly and timely addressed, especially in the import and export sector.

“Today the port development in Colombo and Hambantota has created many avenues for smoother and better trade facilitation in Sri Lanka. The cargo management module introduced by Sri Lanka Ports Authority is a fine example of professional simplification of trade facilitation. It is commendable to see that the Sri Lanka Customs is also working towards a one stop shop and single window concept.

The credit payment system introduced by the state owned Bank of Ceylon is also marked as a positive improvement at the emerging trade facilitation procedures in Sri Lanka,” she added.

She further stressed that a permanent committee working on trade facilitation should be established and the public-private collaboration and further training on all key areas of trade facilitation should be encouraged as they are much vital and important in bridging the existing gaps in the whole process.

Highlights of current trade facilitations at the port sector

The expedited constructions of terminals and other superstructure facilities, utilisation of new machinery, use of more automation, latest IT systems and the continued flow of timely professional training of the personnel and other work forces at Sri Lanka Ports Authority (SLPA) for efficient manoeuvring of future developments in the regional maritime sector were identified as much noted positive trends in the recent trade facilitation activities by a public sector institution in Sri Lanka.

At present, the implementation of cargo management at SLPA in its trade facilitation process has offered numerous benefits to the end customer, such as accurate and quick charges calculation, electronic payment via gateway, expedited checking, less documents, less human intervention, minimised waiting time at gate and direct link to the terminal management system.

The online payment system for port services implemented at SLPA under its programme towards the implementation of e-commerce for better trade facilitation has currently offered the port user community with a unified system for cargo and containers, EDI for communication, an online service request, online payment procedures as well as online invoice approval or rejection.

Concerns raised

The already established National Trade Facilitation Committee in Sri Lanka and matters pertaining to its implementation were also discussed at the seminar. The lack of enough political interest and the commitment to facilitate trade in Sri Lanka were raised vital issues to be addressed to bring better changes towards trade facilitation in Sri Lanka.

It was also noted that work-shops in place of seminars of the nature would be helpful in a greater deal to create better expertise in trade facilitation in the country as well as the region.

Bangladesh Ambassador Mahabub-Uz-Zaman and more than 130 participants from domestic and foreign business community as well as Government institutions from all SAARC countries also attended the seminar.

 – Pix by Daminda Harsha Perera