New external trade policy
Hopes of improving multilateral trade through t
he Doha Development Agenda of the WTO are fast fading. Over 10 years of negotiations, negotiators have not been able to find common ground for the most important issues on the table.
Whether the next 10 years would see the conclusion of the Round appear to be doubtful for many reasons. The international economic scenario has changed tremendously since the beginning of the Round. The lead players of the world and the Doha Round have changed.
No longer are the developed countries of the West calling the shots. No longer are the developing countries such as India, China, Brazil, etc. silent partners of the Round. These developing countries, now referred to as emerging economies are leaders of a new world order.
The issues which were current 10 years ago are no longer of importance, having been replaced by other issues created by the evolving global economic situation. Much has been written about the recessionary situation in the West and the debt crisis which has impacted the rest of the world. All these have added to the non-conclusion of the Doha Round.
The failure of the Doha Round does not imply that the WTO itself is redundant. The WTO’s role in liberalising and regulating multilateral trade cannot be brushed aside and the institution will continue to play that all important role in the future. But Sri Lanka needs to look beyond the Doha Round.
While continuing to be engaged in the Doha Round negotiations, it is now necessary for countries like Sri Lanka to engage in bilateral and regional collaboration rapidly. Sri Lanka’s markets in the West are dwindling mostly due to their economic woes and in some cases due to protectionist policies. We therefore have to look towards the emerging markets.
Intra regional and cross regional collaboration assume significance in this context. Maximising opportunities available through the existing trade agreements within the region is one of the first steps.
Exploring opportunities for untapped or less tapped products already in the list of products available under concessions and inclusion of new products which may have been developed since the agreements came in to force in future negotiations would be useful.
Many countries have already made bilateral and regional collaboration an important element in their external trade policy. India, for example, has concluded or is in the process of concluding a number of such agreements encompassing not only goods but services as well.
The extent to which India places importance in such collaboration can be seen in that they have even liberalised trade contacts with their neighbour, Pakistan, with whom political ties are strained. India’s trade agreements cover many parts of the globe and their agreements are ensuring market access to many of their export under such preferential agreements.
Sri Lanka needs to observe these trends and adapt to the changing global economic scenario.
Do we have a strategy to adapt to these changes? Are the stakeholders including producers, manufacturers, exporters, importers, etc. being consulted on a new external trade policy for the coming years?
Dependence on traditional markets needs to be reduced. More emphasis needs to be placed on preferential agreements such as BIMSTEC and APTA which provide preferential market access to some of the emerging economies .
These agreements include countries such as Thailand, Korea and China with whom Sri Lanka does not have any bilateral preferential agreements.
Previous trade policies placed emphasis on the goods sector and traditional markets in the West. The services sector is a new export area for which Sri Lanka has enormous potential. Agreements which give us preferential access to the services markets overseas need to be promoted.
Sri Lanka may be small in size, but is blessed enormously by Mother Nature together with an educated and intelligent workforce coupled with its strategic location by air and sea, in addition to the recently-found peace, making it a safe location for business. Sri Lanka needs a forward thinking external trade policy to fit into the new global scenario.
(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)
