The World Trade Organization (WTO) in its latest Trade Policy Review(TPR) on Sri Lanka has while crediting the plus factors of the economy also pointed out shortcomings such as widening of the merchandise trade deficit even though exports and imports grew in absolute terms over the review period, the weak fiscal performance, low FDI attractions, no new development in Intellectual Property rules during the review period, regular changers in the additional levies and charges that are applied in addition to the tariff on a wide variety of products’factors that push the Sri Lankan economy backwards. Meanwhile, in the latest Trade Policy Review (2016) stressing their overall assessment on the Sri Lankan economy, the WTO has stated “The middle income economy has performed relatively well”.
This is Sri Lanka’s fourth TPR since the first in 1995 followed by two more in 2004 and 2010.
WTO in its 2010 TPR has stated that the “Sri Lankan economy performed reasonably well.”
WTO considers the TPR mechanism as being a ‘fundamentally important activity’ among other commitments of the WTO ad the TPRs have a significant impact on a country’s investor confidence, trade reform, indicator of policy uncertainty and more importantly, WTO’s future support initiatives for a country.
The WTO has observed as key positive movers during the review period – Maintaining a relatively unchanged tariff regime, implementation of a single window system at the Customs, acceptance of the WTO Trade Facilitation Agreement, participation in regular work and Committees of the WTO and being free from international disputes coming under the WTO Dispute Settlement Mechanism.
WTO also stated that “Sri Lanka, a middle-income economy, has performed relatively well since its last review in 2010, with an average annual growth rate in real GDP of 6% during the review period”.
The TPR comes as a result of the analysis from both The Department of Commerce of Sri Lanka (DoCSL) and WTO observations since 2010.
The Report also highlighted that Sri Lanka’s preferential trade regime has remained unchanged during the review period and it continues to provide long-standing reciprocal preferences pursuant to two bilateral agreements with India and Pakistan, and two regional trade agreements such as APTA and SAFTA. However, this gives rise to the question, “Have we put enough effort to promote free trade after the last review?”
Meanwhile, it also highlighted a weakness in the Sri Lankan economy that of widening of the merchandize trade deficit even though exports and imports grew in absolute terms over the review period, Week fiscal performance, low FDI attractions, no new development in Intellectual Property rules during the review period, regular changers in the additional levies and charges that are applied in addition to the tariff on a wide variety of products have been highlighted.