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| Sunday, 23 October 2005 |
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Negations on WTO trade facilitation welcome by Surekha Galagoda The major challenge faced by members of OECD is agreeing on a set of rules on trade facilitation that give due consideration to capacity constraints including the inadequacy of infrastructure facilities when implementing such measures, said Minister of Trade, Commerce and Consumer Affairs Jeyaraj Fernandopulle inaugurating the Organisation for Economic Cooperation and Development (OECD) Global Forum on Trade Facilitation in Colombo. He said that while we all agree on the desirability of developing rules to promote global trade the issue is undertaking binding commitments that are not commensurate with the implementing capacities of developing countries. International organisations such as the OECD, WB,WCO and UNCTAD have to play an important role based on their mandates and experiences, the Minister said. He said that we are just two months away from the sixth WTO ministerial conference in Hong Kong where important decisions are expected to be taken by the ministers and therefore the theme and agenda items of the conference have the right focus. He said that the forum will help the participants to refine their thinking on practical approaches to address the challenges faced by developing countries, and to place the concerns on the agenda in the early stages of negotiations to achieve social and economic well-being of our citizens. He said that the benefits of trade facilitation have been well researched and well documented. There are convincing arguments that the benefits of promotion of trade and transport facilitation outweigh the costs in the long term. Thus the launching of negations on trade facilitation in the WTO the sole survivor out of the four Singapore issues with the adoption of annex D of the July package is a welcome move. We are proud to say that Sri Lanka being a highly trade dependent small economy with import/export trade contributing nearly 73% of the GDP has been in the forefront of launching these negotiations in the WTO even before the WTO ministerial conference in Cancun. This is due to our sincere belief that trade facilitation will bring direct benefits not only to the business community but also to governments in terms of faster delivery of goods, reduced costs and economic efficiency. We are glad that the discussion in Geneva in the WTO negotiation group is progressing well with more than 50 proposals on the table aiming at clarifying and improving the relevant aspects of three GATT articles. OECD representative Anthony Kleitz speaking on the OECD work on the economic effects of trade facilitation said the benefits of Trade facilitation include more cost effective use of stock and materials, reduced opportunities for smuggling, increase of more government revenue, quicker delivery and to reduce uncertainties. The extent of benefits from trade facilitation depends on the size of TTCs and the possibility of reducing them and TTCs are estimated as equivalent to 1-15% of trading transaction value. He said the countries' possibility to draw benefits depend on their existing level of customs efficiency, political, technical and financial institutional issues when reforms overcome such problems it may bring spill over benefits for the larger economy. Product and geographical trade patterns reflecting country specific differences as well as sector specific diversity. Studies show that countries with lower TTCs experience higher growth in GDP and manufacturing exports while available studies point to significantly increased trade from even modest reduction in TTCs. The impact of TF on government revenue was high because prior to reforms government revenue was low while it increased significantly with reform programs, specially customs revenue particularly in countries with weak customs. The manufacturing sector is highly dependent on rapid transparent predictable border procedures, volatile delivery times which requires firms to keep larger inventories resulting in increasing costs and discouraging inward investments. The two-day meeting was attended by representatives from 43 countries. |
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