NAMA draft endangers number of products in developing world

Written by ASHOK B SHARMA | New Delhi, Sep 2 | Updated: Sep 3 2007, 05:23am hrs
The number of major labour-intensive industrial products of developing countries including India like textiles, clothings, leather, footwear, plastic, rubber, transport equipment, chemicals, machinery, furniture, and fabricated metals are likely to be endangered by a surge in imports, if the non-agriculture market access (NAMA) draft is not suitably amended.

The discussions for multilateral trade is slated to resume in Geneva from September 3 after the summer recess and India will join other developing countries in demanding a revision of the draft released by Don Stephenson, chairman, NAMA, in July, this year, said the commerce secretary Gopal K Pillai. The NAMA draft has proposed Swiss formula coefficients between 19-23 for effecting cuts in bound tariff rates, for developing and developed countries it has proposed coefficients between 8-9. This will lead to deeper tariff cuts in developing countries.

A study done by the International Trade Union Confederation (ITUC) shows that if the NAMA draft is adopted in its present form the bound tariff rates on different products will be drast-ically reduced in the developing world, practically leaving no policy space to protect against any surge in imports.

If the coefficient 19 is applied,Indias bound tariff rate for textiles would decrease from 31.4% to 11.8%, for clothings from 42.3% to 13.1%, for leather from 35.2% to 12.3%, for footwear from 35.2% to 12.3%, for plastics from 40% to 12.9%, for rubber from 35.6% to 12.4%, for wood from 36.5% to 12.5%, for transport equipment from 35.8% to 12.4%, for chemicals from 43.7% to 13.2%, for machinery from 28.2% to 11.4%, for furniture from 35% to 12.3%, and for fabricated metals from 39.5% to 12.8%.

Similarly if coefficient 23 is applied, Indias bound tariff rate for textiles will be reduced to 13.3%, for clothings to 14.9%, for leather and footwear to 13.9%, for plastic to 14.6%, for rubber and transport equipment to 14%, for wood to 14.1%, for chemicals to 15.1%, for machinery to 12.7%, for furniture to 13.9% and for fabricated metals to 14.5%.