New Chief of CCC Importers Section outlines key challenges

Monday, 4 August 2014 00:00 - - {{hitsCtrl.values.hits}}

Following are excerpts from the speech by Ceylon Chamber of Commerce Importers Section newly-elected Chairman Dinesh De Silva at the 79th Annual General Meeting held recently. The Chief Guest at the event was Secretary to the Ministry of Industry and Commerce Anura Siriwardena Looking at our industry and the trade during the recent past and the present; importers have gone through a quite a bit of ups and downs when trying to do their businesses. Volatility in markets has been common in the past too. What does this reveal? Global economic changes, where we have no control.

In this situation, the local operational policy framework plays a very vital role. Importers in the trade expects the policies to be more long term and consistent. Therefore, importers need the assurance and confidence to make certain decisions on investments and business expansion strategies. This is one of our key concerns always. Import section will be tirelessly working with the relevant authorities to ensure the basics are right and they are always in place. Needless to say, import trade has a direct bearing on the Government’s policy changes especially imports restrictions/duty and tariff revisions/bilateral and multilateral FTA, etc. Looking back at the past few years from 2011/12, it is noted that a general contraction in the economy is making it tighter for the imports sector. It is important to note that Sri Lanka has a larger import share in the economy and therefore the role of importers will continue to be significant and is vital for the economy to sustain its current stability and to have long term growth prospects. It is observed that any developing economy in its early stages will record an imports-driven growth or an imports-intensive growth. Key contributions We, the import sector, contribute to the economy in three key areas:

Imports as a value-adder to the Sri Lankan economy
Imports as a revenue earner to the economy and
Imports as a growth facilitator in the economy

Importers are always watchful as to how the Government contemplates cutting the trade deficit. We urge the decision makers to be mindful of the importers who still form a major part of the Sri Lanka’s economy in many ways. We are happy to see the growth in the export sector and strongly feel that it should be increased and diversified more speedily. The import sector will be always hopeful that the Government will engage in a wider consultation process with the sector representatives and look at more consistent trade and tariff policies enabling business sector to invest in sustainable business ventures. The Imports Section of the Ceylon Chamber of Commerce consists of 127 member companies representing a cross section of all sectors and function directly as one of the trade sections of the Ceylon Chamber of Commerce. We follow our vision to be the most influential and effective voice of the importers in the business community. To this effect our 16-member Executive Committee takes over several key areas of importance to importers under different sub committees, such as Sri Lanka Customs and Ports, import tariffs and FTAs, EDI development, trade and finance, shipping and strategic issues, which are some of our key focus areas. Bold reforms Further, we are concerned to move up in the LPI and Ease of Doing Business index which will largely facilitate trade. We applaud the recent Government efforts in taking bold decisions to reform the existing laws to make it beneficial to the trade and they are commendable. Amending the Merchant Shipping Act to meet modern demands of the trade was remarkable in addressing some longstanding unfair trade practices. We wish to place on record our sincere appreciation and gratitude to President Mahinda Rajapaksa Secretary to the Treasury Dr. Jayasundera and to all other policymakers who supported the timely reforms. However, after implementation of the Extraordinary Gazette No. 1842/16 on Terminal Handling and Other Charges by Shipping Agents, Freight Forwarders, Non-Vessel Operating Common Carriers, Container Operators and Consolidators of Cargo, there are still unresolved issues to be taken up with the Director General of Merchant Shipping to have a structured mechanism to handle trade disputes which are paramount important specially for importers and exporters. We as the Import Section of the Ceylon Chamber of Commerce hope to work closely with the relevant authorities to ensure the requirement of the trade are in place without delay. Further, the sector has many more unresolved issues to continuously work on and we look forward to work with the other relevant authorities closely to resolve them successfully as well. We assure our fullest cooperation for any positive change taken by the policymakers. At the same time, we have experienced situations of having ad-hoc implementation of duties/taxes which have heavy impacts on businesses which is not giving confidence for businesses to make long-term decisions without much hesitation. However, under infrastructure development, the Government’s initiatives of having air and sea port development projects and highway projects are certainly benefitting the trade and we will be certainly supporting the Government’s vision of being a logistics hub in 2015. Furthermore, the import section is very keen on understanding the WTO Agreement on Trade Facilitation; whether the Sri Lanka as a member of the WTO is ready to implement all the requirements needed by WTO in terms of trade facilitation.

Areas of concern Finally, importers have some areas of concerns and aspirations which I would like to stress briefly: 1. Implementation of a further simplified consistent duty/tax system for imports 2. To facilitate a free and fair trading environment for both goods and services enabling to compete in the markets, contributing to the growth of the national economy. 3. Tariff structures in Sri Lanka to be in line with regional structures as high tariffs create gray market activities by under-valuation, entry of poor quality goods and finally loss of government revenue through such activities. 4. Re-visit the product and H.S. Classification systems on a periodic basis to revise the applicable classifications/duty and tariffs depending on the latest market behaviours of products including valuation. 5. Implementation of a fully automated and single window concept among all authorities which will save time and cost for the trade. 6. To be consistent with the direction of Free Trade Agreement strategy for businesses to make long term investment decisions. I would like to take this opportunity to appeal to the officials of the Sri Lanka Customs, Sri Lanka Ports Authority, the Sri Lanka Standards Institution, Import Control Department and the other authorities involved in the facilitation of trade to have more and more open consultative mechanisms with trade to improve further the effectiveness and efficiency in the operations. I wish to assure you that Imports Section will serve as a platform to support our member companies by providing a forum for topical issues, ensuring a level playing field for all our members. We expect all these to finally add value to our members’ business.