India And Trade Facilitation In WTO

Updated: May 31 2004, 05:30am hrs
It is now widely accepted that of the four Singapore issues, trade facilitation, transparency in government procurement, cross-border investment, and competition agreements on a multilateral app-roach are likely in the near future in the former two. At the follow-up to the Cancun Ministerial Meeting on December 16, 2003, the chairman of the General Council said that WTO Members would continue to explore the possibilities of agreements on a multilateral approach on trade facilitation and transparency in government procurement. Following the Doha Develo-pment Agenda, Members proposed and sought clarifications on trade fa-cilitation issues.

At a recent informal meeting in Paris on May 14, 2004, a number of WTO ministers agreed that talks should commence on the issue of trade facilitation. A recent paper by Nisha Taneja* points out that while several countries have reservations about beginning negotiations on multilateral agreement on trade facilitation within the WTO, India should agree to the negotiations. Taneja recommends the adoption of effective and appropriate trade facilitation measures by India as being essential to not remain uncompetitive in the global trading environment on account of high transaction costs. But India would have to be very careful in the level of obligation it is willing to undertake, given the financial and time requirement that trade facilitation measures are likely to entail. If they are pursued in the context of the WTO, then India needs to focus on issues relating to the time schedule, details and level of obligation and coverage of trade facilitation measures.

Focusing on the content of the significant proposals made by Members on Article V (freedom of transit), Ar-ticle VIII (fees and formalities connected with imp- ortation and exportation), and Article X (publication and administration of trade rules) of GATT 1994, the paper examines the current status in India corresponding to each of these, examines whether they would impose a burden if accepted, and suggests the level of obligation to be taken if such proposals are accepted at the multilateral level.

It turns out that India is autonomously pursuing most of the recommendations made as part of its re-form agenda. In-dia already has a fairly transparent system of publication of trade regulations and ado-pting the suggested measures will not impose any burden. It is in the process of implementing measures on streamlining export and im-port procedures suggested by Member countries, but meeting global standards would require huge res-ources and adequate time to implement the same. India could accept the proposals on best endeavour basis.

On the issue of transit, the proposals recommend that regional cooperation could provide a solution, an example of which is the treaty of transit with Nepal.

*Trade Facilitation in the WTO: Implications for India, by Nisha Taneja, ICRIER Working Paper No 128, April 2004.