14 Jul,
2012 10:45:45
July 14,
2012 (LBO) - A single document that harmonises different regulations of South
Asian countries for clearing cargo would help boost regional trade, Sri Lanka's
external affairs minister Gamini Lakshman Peiris said.
Trade among countries of the South Asian region was
far below its potential and simplified procedures were needed to increase
volumes, he told a forum on trade facilitation in Colombo Friday.
"Regretfully, volumes of trade within the south
Asian region are far, far below what it should be," Peiris said.
Trade volume within the South Asian Association for
Regional Co-operation (SAARC) region was only five percent of their total trade
compared with 55 percent within the European Union and 22 percent in the South
East Asian (Asean) regional economic bloc.
Critics say economic nationalism had robbed the
freedoms of the citizens to trade with one another, especially after gaining
self determination from British rule allowing producers to prey on consumer
with the backing of the state.
Post independent South Asian rulers have imposed trade
restrictions on citizens to give large profits to powerful rent seeking
nationalist businesses that were perhaps not even seen under the Dutch East
India Company.
In Sri Lanka in particular, which was among the first
countries to restore trade freedoms to people, protectionist businesses had
begun to rob citizens' freedoms again.
Meanwhile Pieris said arguments that it was not
possible to increase intra-regional trade since south Asian countries export
the same products were not entirely valid.
He pointed to Indian vehicle exports to Sri Lanka and
the island's plans to import pharmaceuticals from Bangladesh.
"Globally, within each region very strong steps
are being taken to promote intra-regional trade," Peiris said.
He noted how Sri Lanka lost its market for tea in
Egypt after African countries fixed trade agreements to promote intra-regional
trade.
"Although we had a substantial hold on tea markets
in some African countries such as Egypt, today these African countries have
come together and concluded agreements to promote trade within the African
region.
"It had a negative impact on tea exports from Sri
Lanka into markets we had in various parts of Africa."
He also noted that 70 percent of Indo-Lanka trade is
taking place outside the free trade agreement between the two countries.
"You can have free trade agreements but the
impediments we have to deal with today are largely non-tariff barriers,"
Peiris told the forum organised by the Federation of Chambers of Commerce and
Industry of Sri Lanka, the SAARC Chambers of Commerce and Industry and
Friedrich Naumann Foundation.
"When you try to export there are numerous
problems. We need to simplify trade procedures."
Peiris said some of the problems were a lack of
uniformity in banking and problems in transportation, and cargo clearance at
national borders.
"The cumulative impact of all these impediments
is substantial and constitutes today the major disincentive to increasing trade
volumes within the SAARC region," Peiris said.
"We need to give thought to a single clearance
certificate."
SAARC member countries need to ensure greater
harmonisation of trade procedures and automation of cargo clearance such as
using electronic data transmission.
"This can't be done only by formal talks within
governments and dealing with only tariffs because non-tariff barriers are
pretty inhibitive," Peiris said, adding that SAARC was not only a
political entity but that its economic dimension was now critical.
Professional bodies have established a whole network
of contacts within the SAARC region and this was one of most significant
achievements of the regional grouping up to now.
"Harmonisation of standards, such as among
accountants, will contribute to solving the problem."
Peiris noted how in the EU trade led to European
countries coming together much closer.
"Trade led to political and monetary union
because trade is relatively non-controversial. When you have problems among
countries, you can start with areas where there no problems.
"Then you find it easier to deal with seemingly
intractable problems as we see from Europe's experience."
