Trade and Productivity Commission to be empowered through new legislation

The government plans to empower the Trade and Productivity Commission (TPC) though a new act to continue with the trade liberalisation process on a structured basis, while supporting local firms to get adjusted to the increasing competition arising from foreign firms.

As per the instructions of Development Strategies and International Trade Minister Malik Samarawickrama, the ministry plans to commence shortly to draft the bill while obtaining consultancy services from legal and trade experts.

The TPC recently held its inaugural meeting with the participation of Finance Minister Mangala Samaraweera and Samarawickrama.

Development Strategies and International Trade Ministry Secretary S.T. Kodikara told Mirror Business that the first steering committee meeting of the commission will be held today to decide the way forward for the commission, which includes discussions on the proposed act.

As the TPC is established and functions with the Cabinet approval, he pointed out that the TPC is not a legal binding commission.

“We need to have a new act in order to establish the TPC with the necessary legal powers. If the TPC is approved by Parliament through an act, it will be a legally empowered commission, which would enable the TPC to take actions with legal backing,” he said.

The TPC is set to play a crucial role in the trade liberalisation process by investigating and responding industry requests on tariff phase out and eventually making their recommendations to the Finance Ministry.

Another key objective of the TPC is to formulate and implement the trade adjustment package (TAP) for various sectors in order for them to adjust during the phasing out period of para-tariffs.

In Budget 2019, the Finance Ministry announced its plan to phase out para-tariffs on imports over five years, while sectors are also expected to be exposed to foreign competition with the proposed FTAs with India and China coming into force.

As several labour-intensive sectors have a high level of protection from international markets, the government expects that international competition, following trade liberalisation, could impact firms and jobs in some of the sectors.

Therefore, timely implementation of the TAP remains crucial for some local firms and employees. The government has already allocated Rs.250 million in Budget 2019 to commence the implementation of the TAP and setting up of the TPC. The government plans to help the affected firms to enhance their productivity of by re-skilling workers and assisting them to acquire new equipment.

The TAP is scheduled to be implemented from early next year onwards.

Kodikara revealed that a secretariat would be appointed to assist the TPC consisting of experts in particular areas while the Development Strategies and International Trade Ministry will provide the administrative support to the secretariat.

However, he noted that a secretariat cannot be appointed on a permanent basis as it’s established with the approval of the Cabinet, not by an act of Parliament.

Both the Finance Ministry and Development Strategies and International Trade Ministry stressed that the TPC will act in an independent manner in investigating and evaluating 
industry requests. 
(NF)