A Review of the International Trading Environment in Sri Lanka in the Context of Shipping Hub

Shipping is a derived demand of international trade in economic terms. Therefore, while there are many emphases on developing Sri Lanka as a shipping hub it is imperative to examine the real situation that prevails in the country with respect to the international trading. It is also the important to analyse other contributory factors due to the country’s strategic geographic location. The study employed both primary data and secondary sources. Depth interviews have been conducted with fifteen senior officers of Trade Associations such as Sri Lanka Shippers Council, Ceylon Chamber of Commerce, , Department of Inland Revenue, Customs and Board of Investment of Sri Lanka. Quantitative analysis was done using the Doing Business Reports of The World Trade Organization, The World Bank and the International Finance Corporation, The Global Competitiveness Report of World Economic Forum, and Connecting to Compete Report. The study has cross examined these data using many other secondary sources such as Central Banka of Sri Lanka, United Nations, World Customs Organization, and many industry publications. The analyses were done using SPSS and appropriate illustrations. This paper questions if the international trading environment, its framework, policies, systems and procedures that directly concern doing business across borders are favourable to shipping in the context of Sri Lanka.This study evaluates nine factors that may potentially influence the effectiveness of the international trading system in Sri Lanka.The major share of current performance of shipping consists of transhipment cargo and not domestic imports and exports. Therefore the study emphasizes the fact that the concept of a shipping hub may have only a partial value if the international trading environment in Sri Lanka is ineffective