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Monday, February 8, 1999

Sanitary measures by developed nations may harm India's case 

Ashok B Sharma  
New Delhi: India is posed with the problem of putting up its case against the application of sanitary and phytosanitary measures by the developed countries with the Uruguay Round's agreement on agriculture (AoA) being under review by the World Trade Organisation (WTO).

This is particularly so when the country is about to phase out quantitative restrictions (QRs) on imports to allow market access to other countries as per the agreement.

The Union agriculture ministry has asked the National Council for Applied Economic Research (NCAER) to draft the country's case to be put up for the review. The NCAER has also been asked to suggest the competiveness of agricultural crops vis-a-vis global market.

The NCAER is also asked to review the food security of the country on the basis of adequacy, stability of production and individual's access to food.Based on these suggestions, the government will phase out quantative restrictions (QRs) on imports of these produces in a definite time span.

The Cairns group ofnations has already made it plain that they wish negotiations to take place to further market access opportunites for their agricultural exports. Based on the estimates of the global competiveness of these crops, the government will also ensure a permanent export strategy for these crops, so that the farmers will be having the benefits of global prices.

According to experts, India's case for fixing minimum export prices for certain commodities can also be questioned. But as the country does not provide any direct subsidy for exports like many other countries, the continuance of this norm may not be untenable by the review committee.

Experts stated that one of the major issues which likely to come before the country relates to the non-tariff barriers imposed by developed countries like sanitary and phytosanitary measures and exploitation of child labour in case of carpet and other rural based industries. In the area of market access, while non-tariff barriers have been banned under the AoA, in practiceaccess is still felt to be difficult in many cases and stops developing countries from benefitting fully from potential export opportunities. Growth in agricultural trade has shifted partly to processed/higher quality niche markets which are not so fully penetrable by new exporters, partly due to high costs in complying with the sanitary and phytosanitary standards (SPS) in these markets. It would, therefore, be in India's interest to call for an harmonisation of SPS standards and asking for technical assistance to upgrade its capacity in quality control and related infrastructure in order to be able to meet such standards.

Already some standards are issued by global bodies like Codex Alimentarius Commission for processed foods, FAO's International Plant Protection Convention (IPPC) for agricultural produces and the Office Internatonal des Epizooties (OIE) for livestocks. India should make proper representation before these bodies for its case as the strandards formulated by these bodies are accepted by theWTO in settling disputes before countries. But there has been cases in past when a standard on skimmed milk and milk products was in the process of formulation by Codex, the EU countries opposed the iport of skimmed milk from India on the ground that the milking of animals in the country was manual and not through machines. They also opposed the import of skimmed buffalo milk. In absence of certain strand formulations by these global bodies on certain products, India should call for a harmonisation of standards on these products.

Experts stated that the country's case before WTO is quite strong as the country has already reported zero levels for the aggregate mesures of support (AMS) to agriculture. Even with the product-specific base AMS at negative 22 per cent, trade-distoring support could be increased by 32 per cent (the negative 22 per cent plus another 10 per cent within de minimis rule).

The flexibility under non-product-specific AMS is much smaller at 7.5 per cent of the value of production in1995-96 which can be expanded by only an additional 2.5 per cent. In addition, support under the STD clause is exempted from reductions although the actual level is small being less than one per cent of the total value of production in 1995-96. This could be increased provided that the criteria underlying these support as reported in the original schedule are unchanged. No limits are placed on Green Box measures. In the extreme case, where support levels under the AMS headings have to be realised markedly, perhaps reinstrumentation of policy measures may be required like shifting from AMS type to the Green Box.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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