Financial Daily from THE HINDU group of publications
Friday, Aug 30, 2002
Industry & Economy
End of quota regime must not block textile exports: Official
NEW DELHI, Aug. 29
INDIA should ensure that the dismantling of the mutli-fibre agreement (MFA) and the end to quota regime should not be replaced or "nullified" by the introduction of restrictions disguised in various garbs to block the export of textiles and clothing and other developing countries, according to the Commerce Secretary, Mr Dipak Chatterjee.
Speaking at the end of the national seminar on anti-dumping and subsidy issues, organised by the Department of Commerce here, Mr Chatterjee said the Doha Round of negotiations were scheduled to be over at a time when there would be major change in the rules governing global trade of one of the product groups of "crucial export interest to us viz., the textile and clothing sector".
As the derogation from the erstwhile GATT and now WTO rules available for the trade in this sector over the last 40 years would cease from January 1, 2005, and the entire trade of textiles and clothing would be integrated, this has a particular relevance for negotiations on WTO rules, he said.
The Commerce Secretary said apprehensions have been voiced in certain quarters that the persistent demand from major trading countries preserving the remedial effects of trade defence measures could be used as a tool for enforcing anti-dumping and countervailing duties on products not included in the original probe. During the course of the ongoing negotiations, "we would need to take appropriate position on this issue keeping vital export interests now".
Referring to the need for beefing up domestic anti-dumping machinery, Mr Chatterjee remarked that India was in the midst of adjusting to a QR-free regime.
"In the backdrop of economic liberalisation, we cannot but be vigilant, as the sheer size of our market could be a temptation for some exporters in other countries to indulge in unfair trade practices. Hence, the need for trade defence instruments with flexibility to protect our industry from injurious dumping or from a sudden surge in imports," he said.
On issues pertaining to subsidies agreement, Mr Chatterjee said that this agreement carries certain imbalances and is in some ways "prejudicial to developing countries interests".
As such, it is crucial that the proposals made by New Delhi to the Subsidies Committee and Negotiating Group on rules on implementation-related concerns were followed with vigour.
Alongside, he said, "we would need to internally examine how best to fine-tune our promotional schemes so that these are not countervailed during investigations". It might also be useful to scan whether certain amendments could be proposed to the Subsidies Agreement so as to rationalise some "of our promotional schemes, particularly from the point of view of ensuring a level playing field for our exporters".
Mr Chatterjee also regretted that while a safe haven has been carved out for developed country export credit schemes, similar flexibility was not available to developing countries. Higher interest rates for export credits in developing countries arise out of the perceived "sovereign risk" which place such countries perpetually at a disadvantage compared to the OECD countries.
Hence, "we need to hold consultations with economic and international banking experts to formulate suitable proposals on this subject", he added.
Earlier, addressing a news conference the Designated Authority in the Directorate of anti-dumping and allied duties, Mr L.V. Saptharishi, maintained that the national seminar with participation from experts and legal professionals was a "very useful experience".
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