Removing domestic barriers could cut export costs by 25-30%: report

Removing the domestic barriers to trade could cut the cost of Sri Lankan exports by 25 to 30 percent, according to the Colombo-based think tank Verité Research.
“Removing these barriers can go a long way in boosting exports. Interviews with exporters revealed that improving the efficiency of border procedures could cut the cost of products by as much as 25 to 30 percent,” Verité said in a research paper.

The World Trade Organisation, aimed at reducing such barriers through the Trade Facilitation Agreement, estimates the trade costs to go down by only around 14.3 percent on average, mostly across the developing countries such as Sri Lanka.
Based on various case studies, Verité said that poorly constructed regulations, weak bureaucracies, identical and repetitive border procedures by state agencies that lack interagency cooperation and lack of information sharing by the government with the exporters result in high export costs and discourage exports.
Verité added that the agricultural products are the most seriously affected exports, since the quality of the products may be compromised if they are highly perishable.
“The study finds that the domestic trade barriers are a significant impediment to the growth and diversification of the agricultural exports,” Verité said.
Sri Lanka’s exports to gross domestic product (GDP) have fallen from 33.3 percent of GDP in 2000 to 12.68 percent of GDP in 2016.