India Wants Key Non-farm Products As Unbound

New Delhi, October 25: | Updated: Oct 26 2002, 05:30am hrs
In its preliminary views on the modalities for tariff reduction commitments submitted to the WTO negotiating group for non-agricultural products, New Delhi has proposed that the developing countries be allowed to keep certain domestically sensitive products as unbound. It also has sought flexibility to bind tariff lines that remain unbound above the current level of applied rates.

For bound items, it has suggested that reduction commitments be started from the last negotiated level of commitments made at the Uruguay Round. These views are in pursuance of the Doha work programme mandate for market access negotiations on non-farm as well as environmental products. On non-tariff barriers, New Delhis paper has cautioned against inclusion of legitimate instruments available to developing countries under the various WTO agreements such as export tariffs or levies are not negotiable as the subject is outside the Doha mandate.

Giving his opinion on the three methods to discuss the modalities for tariff reductions, Anwarul Hoda, a former WTO deputy director-general, told FE that ultimately all of them (methods) will have to evolve into a mix to reach an agreement. Adoption of one method may not be beneficial, he added. Stating that Indias tariffs are higher than those in the rest of the world, Mr Hoda felt that negotiations need not be restricted to non-agricultural items alone. New Delhi must also raise the issue of movement of natural persons in the services sector and plead for reduction in farm subsidy by industrailised countries.

New Delhi paper is also against including environment-friendly products of export interest to developing countries in the list of environmental products. The mandate requires members to aim to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries.

The negotiations further are to take fully into account the special needs and interests of developing and least developed countries, including through less than full reciprocity in reduction commitments in accordance with the provisions of Article XXVIII of GATT 1994. The three methods are product-to-product requestoffer), formula approach and sectoral approach (bringing down tariffs to zero as in the case of information technology agreement-I).

On all these three methods, New Delhi paper says that its views are still evolving and therefore wants several aspects to be clarified on grounds that adoption of any of them will cause serious distortions in developing economies. At present, India has bound 68.2 per cent of the tariff lines for non-farm products.

They are 40 per cent for finished products and intermediates and 25 per cent for raw materials.

In regard to the modalities, the time frame for submitting proposals by member countries is November 1, though proposals submitted until December 31, 2002 will be fully taken into account at the first meeting of the Negotiating Group in 2003.