Sri Lanka has imposed import restrictions on 367 items such as milk products, fruits and fish that have been dubbed “non-essential” as part of the bid to tackle the economic crisis triggered by forex shortages. The import control by a Gazette notification dated March 9 makes the 367 items to be barred from importing without a valid license.
So, what can you do to overcome the gaps created by these import bans or restrictions? Here are some common ways in which other countries around the world tackled this very problem.
Trade and economic sanctions
This kind of barrier can be overcome by choosing markets that are not affected by economic sanctions. Alternatively, exporting a different line of products and services which are not subject to trade sanctions can also be looked into. You can also delay entry into a specific market, if it appears that sanctions may be lifted.
Export and import controls
If there are controls applied to markets, select a different market with which to trade. This is definitely the simplest option. However, alternatively, another method of approaching this would be developing goods and services locally to trade for the desired products or services. This is a more challenging approach, but rewarding in the long run.
Customs tariffs and taxes
Developing value added activities in the target market such as after sales services, which are not subject to tariffs is a good method to overcome this. This will also enhance the value of the more expensive product. One can also consider producing goods in the target market to avoid the need for importing. You can also partner with an organization in the target market that will produce goods at its facilities.
Import and tariff quotas
Try exporting to different markets which are more welcoming. You can also develop products and services that will not be subjected to quotas. You can also produce goods and services in the target market to avoid having to import them into the country, which will also help retain the cash flow within the country itself.
Government subsidies
Develop value-added activities in the target market to increase the attractiveness of that specific commodity, to foreign purchasers. You can also adapt the product or service to give it more appeal, and in doing so, justify the enhanced price.
Trade Blocks
If the organization’s nation is not a participating member, that nation can partner with an organization in a preferred trading relationship, with the chosen market or in the chosen market. Such a country can also set up a subsidiary organization in the chosen market or in one that has a preferred trading relationship. Investing in production facilities in the chosen market to avoid the need for exporting is another good long term solution. Adapting the product or service to enhance its perceived value and justify the increasing price is another tried and tested approach.
These are some of the main methods that have been implemented by countries around the world to overcome gaps in import restrictions. The key is to tailor these to the situation in Sri Lanka and utilizing this to the best interest of the country’s economy.
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