Aug 23, Colombo: The World Trade Organization (WTO) in its latest Trade Policy Review (TPR) on the country has stated that the country's economy has performed relatively well.
Highlighting Sri Lanka's achievements at length, the WTO in its TPR 2016, which has the final conclusions on the 164 member country review session in Geneva in 2016, says the middle-income economy has performed relatively well since its last review in 2010.
"Its economy has shown resilience in the aftermath of the global financial crisis and following the resolution of the internal conflict, with an average annual growth rate in real GDP of 6% during the review period," the report says.
The WTO assessment results stand as a forceful indicator of positive sentiments on improved investor confidence, lessening policy instability and better trade reform outlook for Sri Lanka, the Minister of Industry and Commerce Rishad Bathiudeen said.
The latest report is Sri Lanka's fourth TPR since December 2010's third review. Sri Lanka's first TPR was in 1995 and the second was in 2004.
While the TPR is not intended to be an enforcement document, it is an indicator of progress made by WTO member countries. Still, as a result of the in-depth country surveillance by WTO for this report, the TPR mechanism is considered to be, in WTOs own words, 'fundamentally important activity running throughout the work of the WTO.' TPRs therefore impact on a country's investor confidence, trade reform, indicator of policy uncertainty, and more importantly, WTO's future support initiatives for Sri Lanka.
The new Unity Government's Policy Orientation to 4th TPR session on 1 November 2016 in Geneva, was presented by Minister Bathiudeen, who led the 8-member Sri Lankan delegation to the international TPR session.
"The 4th Trade Policy Review of Sri Lanka is taking place at a historic moment under the 'National Unity Government', which was established for the first time in the country by the coalition of two main political parties" Minister Bathiudeen stressed to last year's Geneva audience. After the conclusion of presentation many economies gave accolades to Sri Lanka including European Union, US, China and Australia.
The 2016 TPR said "Trade played an important, albeit declining role in the economy during the review period, as trade in goods and non-factor services declined from the equivalent of about 55% of GDP in 2011 to 49% in 2015. While exports and imports grew in absolute terms over the review period, the merchandise trade deficit widened. 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. In terms of the multilateral trading system, Sri Lanka granted at least MFN treatment to all its trading partners, made proposals to the Doha Development Agenda and participated in the regular work and Committees of the WTO, and has not been involved in any disputes under the WTO Dispute Settlement Mechanism during the review period. Sri Lanka made many WTO notifications during the review period that pertained mainly to customs valuation, agriculture, import licensing, SPS, TBT, TRIMs, and TRIPS."
Stressing Sri Lanka's trade policy predictability and institutional improvements, the TPR says: "The tariff regime remained relatively unchanged during the period, with applied rates declining slightly from an average of 11.5% in 2010 to 10.3% in 2016. The main developments in terms of customs procedures during the period were Sri Lanka's implementation of a single window system in January 2016 and its acceptance of the WTO Trade Facilitation Agreement in May 2016. Sri Lanka's single window application allows all entities involved in importing and exporting to submit required regulatory information to a single electronic gateway and to use electronic funds transfer or online payments."
The Department of Commerce of Sri Lanka (DoCSL), under Minister Bathiudeen with many other Sri Lankan authorities, performed the arduous task of compiling and submitting the comprehensive Policy Statement on Sri Lanka's trade and economy for the once in six year TPR that applies across 164 members of the WTO.
DoCSL's report is one of the only two reports used for final country assessment in the TPR. WTO Secretariat, based on its own and peer country reviews about Sri Lankan economy, compiles the other report on Sri Lanka. The TPR is a result of the analysis from both DoCSL and WTO observations since 2010.