Closer Links

Sept 05, 2008 (LBO) – Trade experts have proposed reviving sea and rail links between Sri Lanka and the Indian sub-continent as part of greater regional connectivity moves required to improve trade in the region.

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Transport costs outweigh trade tariffs in the region, said Prabir De, a Fellow of the Research & Information System for Developing Countries (RIS), a think tank.

As an example he said that the fuel surcharge on sea freight in Asia had increased to 1,130 dollars per forty-foot container by July 2008 from 455 dollars in January 2007.

The incidence of transport costs is higher than tariff incidence in south Asia.

“South Asian countries are paying more towards trade transportation costs compared to customs tariffs,” De said in a paper prepared for the first summit on economic integration in South Asia held in Colombo.

The economic summit was organized by Sri Lanka’s Institute of Policy Studies, a think tank.

The heavier the good, the larger the transportation costs in south Asia.

De said south Asian countries import higher weights, thereby implying freque