Sri Lanka slow to embrace ‘paperless trade’ and to send positive signals to the world

By Shanta De Silva

Member states of the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) are preparing to sign a ‘Framework Agreement on Facilitation of Cross-Border Paperless Trade’ between countries in Asia and the Pacific, in Bangkok on August 29, 2017. Although Sri Lanka has actively participated in the development of this framework, it is reported that it has been slow in taking further action.

Bangladesh on the other hand has become the first South Asian country to announce that their Cabinet of Ministers has approved the signing of the Framework Agreement on Facilitation of Cross-Border Paperless Trade, which will accelerate its integration in the digital economy and regional and global production networks. http://www.thefinancialexpress-bd.com/2017/08/01/78761/Dhaka-set-to-sign-UN-paperless-trade-pact; http://www.newagebd.net/article/21036/cross-border-paperless-trade-to-reduce-cost-corruption-experts; http://www.thedailystar.net/business/get-ready-paperless-trade-minister-1442254

As a consultant in trade facilitation for over thirty five years, and having served as the Secretary of Sri Lanka Trade Facilitation Committee (SRILPRO) 1980-1999 and an Advisory Committee of the Sri Lanka Export Development Board/Ministry of Trade and Shipping, the writer confirms that Sri Lanka could boast of being the forerunner in all of Asia to introduce a set of UNLK (United Nations Layout Key) documents, which is the international standard trade and transport documentation. This was on 1 March, 1981, which was followed by Hong Kong, the same year. Having introduced several trade facilitation measures such as the elimination of obsolete licensing schemes and practices such as ‘floor pricing’ and standardising the remaining trade and transport documents and codes used in international trade; by 1986 SRILPRO was well on its way to initiate action to automate Sri Lanka’s external trade procedure in parallel to similar action initiated by the government of Singapore. SRILPRO appointed a sub-committee for this purpose, comprising ICT experts from relevant institutions. Due to personal interests overtaking the interest of the country, Sri Lanka finally settled down to adapting ‘ASYCUDA’, which is based on software developed by the UNCTAD. Consequently, only yesteryear, Sri Lanka got closer to the completion of automation of customs and port procedures while several countries in the world and several countries in Asia and the Pacific region have elevated themselves from that stage and are now in the process of introducing paperless trade across borders. See, https://unnext.unescap.org/content/global-survey-trade-facilitation-and-paperless-trade-implementation-2017

The state of indifference towards automation of external trade procedure in this country can be witnessed at exit gates at our ports and at the warehouses where unaccompanied packages are cleared.  According to preliminary data of the UN on trade facilitation and paperless trade implementation in developing countries, presented at the sixth Aid for Trade Global Review in Geneva last month, Sri Lanka’s implementation rate barely reaches the 50% mark, while 60.1% is the Southeast Asia overall regional average. Sri Lanka is behind India and Pakistan in this respect. This implies that Sri Lanka can really benefit from the capacity building, technical assistance, and information sharing and pilot projects expected to take place under the regional framework that is to be signed in Bangkok in a few days’ time. https://www.adb.org/sites/default/files/publication/330671/trade-facilitation-inclusive-region.pdf. 

An impact study published by the United Nations, shows that implementation of cross-border paperless trade could help Sri Lanka reduce its trade time by up to 25%, boost exports by 7-8% and help reduce our overall annual costs of trade by $ 240 million a year. (https://unnext.unescap.org/content/global-survey-trade-facilitation-and-paperless-trade-implementation-2015).

While the ratification of an UN treaty can take time; being a signatory to the ‘Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific’ to be signed shortly, is an indication of political will, and ratification is to follow at a later stage. Sri Lanka, not being involved at this stage in the first group of participants, sends a negative signal in terms of its commitment to modernising trade and taking part in the digital economy. If we fail to sign the framework agreement this month, there is another opportunity during the “treaty event” to facilitate signing it and many other treaties on the side of the UN General Assembly between 19-22 September; hence Sri Lanka can still sign it in New York until 30 September, 2017. See https://treaties.un.org/pages/TreatyEvents.aspx?path=Treaty/Focus/Page1en.xml.

As ‘trade facilitation’ is an investment that would contribute immensely towards the social and economic betterment of this country, let us hope the policymakers and the relevant institutions, such as the Sri Lanka Export Development Board (EDB), the Department of Commerce, and Sri Lanka Customs, would take timely action to benefit from the developments in trade facilitation.

[The writer of this article was Chief Technical Advisor in Trade and Transport Facilitation/eBusiness, Projects of UNCTAD/World Banking Nepal and Pakistan; and in four other countries in Asia and Africa as a Consultant in Trade Facilitation of UNCTAD-International Trade Centre (ITC), CFTC (British Commonwealth), and UNOPS. Also he has undertaken several assignments as consultant in TF for UN-ECE/CEFACT, GTZ, ADB and UN-ESCAP’s UNNExT. The writer can be contacted at: [email protected]]