Review Of Draft National Trade Policy

By W. D. Lakshman –November 21, 2016

Prof. W. D. Lakshman

Sri Lanka Association for Political Economy (SLAPE) being a body of professional Economists engaged in discussing, formulating and appraising national economic development policies and strategies, felt it opportune to examine the Draft National Trade Policy, as the subject is very current, and relevant to the ongoing discussion on the proposed bilateral and regional preferential trade agreements. A panel discussion was thereby held on October 19th at the University of Colombo with Dr Ravi Ratnayake, Advisor to the Ministry of International Trade, and one of the architects of the subject policy draft, Mr Samantha Kumarasinghe, Chairman of Nature’s Secrets Company Ltd, Mr Anushka Wijesinha, the Chief Economist of Ceylon Chamber of Commerce and Dr Kenneth De Zilwa, Director of Econsult Investment and Advisory Services, as panelists and Professor W D Lakshman, the Vice Chancellor of SANASA Campus and the Convenor of the SLAPE chairing the session.

The SLAPE, guided by the objective of taking care of national development interests, is of the opinion that what was revealed through the panel discussion are of national importance, and therefore considers it opportune to makethe policy makers as well as the general public aware ofwhat transpired during the session. Hence, this statement.

Many important issues were flagged during the discussion. Among those, the principal concerns included: (i) the need for the draft National Trade Policy (NTP) to be guided by and/or designed within the broad framework of a solid well-thought out national development plan, (ii) the necessity of developing such a policy within a national industrial policy that has been lacking in the entire post- 1977 period, (iii) the evidence indicating that ‘free trade’ in itself has never ever led to economic development, so that the necessity to find alternative policy direction to the orthodox ‘free trade’ panacea, (iv) the failure of the draft national trade policy to recognise the complementarity of import substitution strategy to the notion of export-led growth.

Most importantly, it was revealed through the discussion that the draft National Trade Policy has not been guided by a solid national development vision. Any policy on international trade has to be developed after a thorough strategic appraisal of all potentially influential determinants and their interrelations, including national economic development, wellbeing of people, national autonomy and sovereignty, and geo-political interests of regional countries. As the draft trade policy document itself highlights, SLAPE emphasizes that the Government ought to carefully review the progress achieved through, and continuing non-trade barriers under, Indo-Lanka Free Trade Agreement (ILFTA) before embarking on signing a comprehensive agreement in the form of ETCA. The draft policy paper does not indicate that such strategic studies have been undertaken. Therefore, the SLAPE requests the Government that it should not rush through to develop a national Trade Policy for Sri Lanka but should properly appraise the ground reality and set national development goals prior to formulating national policies on any sector or activity of the economy.

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