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New Delhi, April 11: THE Federation of Indian Chambers of Commerce and Industry (Ficci) has called for the abolition of two-tier Tariff Rate Quotas (TRQ) for agriculture under the WTO as it had failed to priovide the agreed level of market assess to developing countries.

“TRQs applied by developed countries must be replaced by reasonable or equivalent tariffs at the earliest. The experience shows that the over-quota tariffs, imposed by developed countries, on some of the commodities of export interest to developing countries are prohibitivee and discriminator,” Ficci has said.

TRQ is simply a two-tiered tariff under which a limited volume (quota) can be imported at the lower tariff and imports in excess of the quota volume are charged the higher tariff.

Ficci said over-quota tariffs that developed countries impose on agricultural goods from developing countries especially on meat, cereals, sugar and dairy products were more than five times those on manufactured products. In European Union (EU), out of quota tariff for bananas is 180 per cent, in Japan these tariffs range between 460 to 600 per cent for dried beans, peas and lentils, and in the US, for groundnuts in shell they stand at 164 per cent, Ficci statement said.

A TRQ from a legal point of view is not considered a quantitative restriction since it does not limit the quantity that may be imported. One may always import more by paying higher over-quota tariff, but in most cases these tariffs are high enough to deter importers form purchasing beyond the in-quota volume. For all practical purpose, trq has the effect of a quota in such a case, Ficci said.

Abolition of TRQs would be of critical interest to developing countries in the current negotiations as it would provide level playing field for agricultural exports, the chamber said.

“The minimum access provisions under the Agreement on Agriculture (AoA) were anticipated to have their greatest impact in markets that had been insulated from international trade, but this has not happened in several cases,” it said.

TRQs are also more often employed by developed industrialised countries than developing countries. According to WTO statistics, only 37 WTO members, out of the total of 140 members, currently have a combined total of over 1350 tariff quotas in their commitments.

Only three countries, Norway, Poland and Iceland, account for one-third of all TRQs. EU maintains around 87 TRQs and the US has around 54 such TRQs. The products which are mostly subject to tariff rate quotas were fruits and vegetables, meat products, cereals and dairy products.