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India's trade envoys to the
WTO are
comfortable with the proposed norms on concentration of tariff cuts,
but are firm that the sectoral proposals at the Doha Round will have
an adverse impact on the country's economy.
According to the
anti-concentration
principle, sensitive industrial tariff lines, which would not be
subjected to full formula-based tariff cuts, cannot be concentrated
in one particular sector or sub-sector.
The current proposal on the
table says
that a developing country will have to reduce import duties for at
least 20% of the tariff lines or for products that account for 9% of
the total value of imports in that sector.
"For countries like India,
the more
important factor is that the full formula cuts will have to be taken
in products that account for 9% of imports in a sector. In many
sectors, a few products account for large imports. Hence, the
industry needs to be protected against those items for which large
imports are seen. The proposal on subjecting 20% tariff lines to full
formula cuts is less significant for us. In effect, negotiators are
comfortable with the anti-concentration proposal," a government
source said.
The anti-concentration
proposal was
mooted by the European Union, which wanted that developing countries
should undertake formula-based tariff cuts in at least 50% of tariff
lines in a sector.
The Indian government's
assessment is
that the key sectors which are likely to be impacted by
anti-concentration include automobile components, aircraft, chemicals
and silk.
"Developing countries may
get some
relaxation regarding exemption of sectors having less than 50 tariff
lines from anti-concentration clause. This would take care of sectors
like silk industry in India where lot of artisan weavers are
dependent on," officials added.
An analysis by the
International Trade
Union Confederation pointed out that adverse impacts of
anti-concentration could include restricted development of value
chain in a sector and loss of competitiveness as overhead costs of
firms will remain fixed while only some portion of the products would
see protection against cheap imports. Moreover, even protected goods
would lose out as consumers would opt for cheaper imported goods of
the same category.
However, officials
maintained that
there could be no compromise on having sectoral talks for undertaking
full duty cuts in certain sectors. According to this principle,
certain countries will negotiate to reduce tariffs of certain
identified sectors to zero.
"Any Indian sector that is
subjected
to sectoral talks would adversely impact the entire sector. In fact,
this is one of the real issues that is yet to be sorted in Doha Round
talks and there is no comfort zone on it," officials added.
(Source: Business Standard)
August 25, 2008
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