Office for International Trade; beneficial to country or agenda-driven?

Last week, SJB MP Dr. Harsha de Silva at a parliamentary debate underscored the necessity of expediting the establishment of the Office for International Trade (OIT), which was ratified by the Economic Transformation Act (ETA) No 45, 2024. According to the legislation, the mandate of the OIT is to promote and develop Sri Lanka’s international trade, coordinate all international trade activities, and facilitate the growth of exports.

A bone of contention with regard to the role of the proposed institution, however, is that its areas of responsibility overlap the functions of the existing state institutions associated with international trade, including the Department of Commerce (DOC) as well as the EDB.

Despite the NPP’s vehement objections to the contentious legislative enactment a year ago, President Disanayake at this year’s Sri Lanka Economic Summit asserted that his administration was planning to implement the ETA with amendments. The Government has not clearly mentioned whether they would take steps to establish the OIT. Meanwhile, subsequent to the 2024 Presidential Election, K.J. Weerasinghe, who served as Chief Negotiator of the International Trade Office (ITO) – the makeshift predecessor to the OIT during Wickremesinghe presidency – told the press that he was unaware of the new Government’s stance on the continuity of the OIT and that he had been asked to continue in his role for the next few months. What happened to Weerasinghe – a retired DG of the DOC – as well as his ITO thereafter is unknown. 

Prior to the NPP coming into power, former President Wickremesinghe and the advisors close to him were rather lukewarm about the DOC and therefore wanted a mechanism to bypass the latter. It was through the ITO he fulfilled that task and quite ridiculously the substitute to the DOC had only two employees under Weerasinghe. Even during the Yahapalana Government, the function of negotiating free trade agreements was executed by a provisional organisation called Agency for International Trade (AIT), which too was led by Weerasinghe. 

The AIT was instrumental in leading the negotiations of the SL–Singapore FTA, which was not only contested in courts but criticised severely for its glaring shortcomings. After Weerasinghe’s return as the Chief Negotiator of the ITO when Wickremesinghe became President, the former led the deliberations of the SL-Thailand FTA and even the said agreement remains in limbo due to numerous drawbacks.

At the time the ETA was passed, Sonali Wijeratne, former DG – DOC, severely criticised the envisaged OIT because according to her, the legislation set the platform for high-level politicisation, conflicts of interests, lack of accountability, apart from accommodating vested interests. In the event the OIT – about which numerous objections exist – becomes operational, what would be the role of the DOC – the mandated, A-graded, public service department to negotiate trade agreements? Wickremesinghe wanted to setup a separate institution as he felt the pace at which the DOC was undertaking trade negotiations was quite slow. However, in democracies, things move slowly in the public service, and it is not confined to Sri Lanka. 

Even during the recent negotiations with Washington, the DOC was largely invisible and the process was led by the officials of the Finance Ministry. It would be sensible for the Government department, which was established during the time of the British colonial rule, to contribute actively by offering its technical inputs to the Government in the pursuit of negotiating trade deals with trading partners.

The Government has moved in the right direction by making a permanent appointment to the position of DG at the DOC, which remained vacant for a long time. With regard to entering into bilateral trade agreements, it would be prudent for policymakers to develop a coherent framework by making use of the DOC’s technical/subject expertise while obtaining insights from the key public and industry stakeholders instead of establishing new entities that may be led by few retired individuals to drive their personal agendas.