Sri Lanka’s renewed push to rationalise tariffs – as set out in the National Tariff Policy (February 2026) – will steadily expose sectors that have been protected by para-tariffs to fresh import competition. Sri Lanka has been here before, and we know that it generates industry pushback and political pressure. An accompanying trade adjustment programme that is designed well, and is credible in its implementation can mitigate this risk. It can provide a smarter institutional framework, anchored to the objective of supporting firms and workers adjust to a new operating environment. Drawing on the detailed framework developed during 2018–2019 but never fully operationalised, this Policy Note recommends establishing an independent Trade and Productivity Commission, with its own Secretariat, analytical capacity, and a mandate to monitor follow-through, interlocked with, but distinct from, the proposed new National Tariff Policy Committee. It also recommends complementary mechanisms: Industry Competitiveness Councils to resolve sector-specific, horizontal constraints; TVET-based worker retraining; and time-bound investment promotion to create new job opportunities. The templates and reference material for technical design already exist; what is required now is the institutional will to implement them firmly and credibly.
