Para-Tariffs and Sri Lanka's New Protectionism

Abstract

In November 2004, Sri Lanka reversed its relatively open trade policies and now has one of the world's most complex and protective import regimes. This has been done by deploying a variety of para-tariffs over and above customs duties, the significance of which appears to have escaped the notice of most of Sri Lanka's trading partners, including India. Unless rapidly unwound, these new policies will seriously damage the country's future economic growth. They also subvert Sri Lanka's preferential trade agreements, and breach its World Trade Organisation commitments.