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TAP to be presented to Cabinet this month

Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 11 September 2018 00:00

  • Recommendations fromCabinet and private sector to be incorporated 
  • Cabinet “in principle”approved TAP says PM 
  • TAP to provide assistance to local companies affected by liberalisation


By Uditha Jayasinghe 

The Trade Adjustment Programme (TAP) by the International Trade and Development Strategies Ministry is likely to be presented to Cabinet this month, after recommendations and feedback from stakeholders, including Cabinet members, are incorporated into the final document.  

A draft of the long-awaited Trade Adjustment Programme (TAP) was released late last month for stakeholder feedback. The document details how domestic enterprises would be supported through regulatory and policy reforms, as well as specific schemes of grant support, when local businesses are affected by increased liberalisation, including planned tariff removals by the Government.

The TAP document was also presented to Cabinet, but approving it was deferred as several Cabinet members had requested time to peruse the document and give feedback to Ministry officials. The responses from the Cabinet would be incorporated along with private sector and other stakeholder recommendations into the final draft, a top official said. 

“The Ministry is in the process of creating the final draft that will include proposals from different associations and Cabinet,” International Trade and Development Strategies Ministry Secretary Chandani Wijewardana told Daily FT adding that it would be presented to Cabinet by Minister Malik Samarawickrama. Earlier this week, Prime Minister Ranil Wickremesinghe said that TAP had been approved “in principle” by Cabinet. Both the Prime Minister and Samarawickrama are participating at the Association of Southeast Asian Nations (ASEAN) summit in Vietnam this week.   

Private sector stakeholders had recommended a clear demarcation of powers for the special unit that would oversee TAP to be set under the Finance Ministry and had requested more information on funding, timelines, and duration of the program, sources said. 

TAP aims to provide comprehensive assistance for firms and workers and institutional mechanisms to ensure transparent, credible, and timely delivery of trade adjustment assistance.

It is focused on data-driven decisions, making use of analytical tools to assess vulnerable industry sectors, a skills retraining and labour market flexibility program alongside tariff liberalisation, mechanisms for industry sectors to reveal their productivity constraints and have them resolved, and clear communication to stakeholders of the why, what, and how of TAP, the document said. 

The draft said a Trade and Productivity Commission (TPC) would be established to be the independent body that analyses TAP, which examines quantitative and qualitative evidence, investigates and responds to industry requests on tariff phase out, monitors the recommendations from the Industry Competitiveness Councils (ICCs) that are established to solve productivity constraints of affected sectors, and makes recommendations to the Ministry of Finance for action. 

The TPC will consist of independent Commissioners (possibly appointed by the Constitutional Council) and accountable to Parliament, supported by a Secretariat of qualified professionals who are competent in trade and industry economics (initially can be seconded from the Department of Commerce and Central Bank). 

“A new unit at the Ministry of Finance will be the ultimate arbiter of TAP, and would be headed by the Secretary to the Treasury, who will take final decisions regarding TAP matters, following the recommendation of the TPC. For example, taking the final decision to slow the tariff phase out for a particular sector, following the investigation and recommendation by TPC,” the draft document said.

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