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Ministry moots study on impact of NTBs on exports

Mohan Padmanabhan

KOLKATA, July 27

THE Commerce Ministry plans to carry out a further analysis of non-tariff barriers (NTBs) of important WTO members and trading partners of India, as part of a new exercise to quantify their impact on the country's exports.

Talking to Business Line here on Thursday, Dr H.A.C. Prasad, Economic Advisor, Department of Commerce, said the Economic Division of the department was now working on a complete update of the preliminary report on NTBs faced by the country.

He said the comprehensive study based on vital inputs provided by various EPCs (export promotion councils) and other trade bodies would be somewhat like the one prepared by MITI (Ministry of International Trade and Investment) of Japan to facilitate the country's external trade.

All efforts are being made to get the study completed before the Doha WTO Ministerial conference in November, he pointed out. He also clarified that various NTB-related issues would find place in the medium-term policy for export, now on the anvil.

Outlining the policy issues that have to be addressed in the immediate term for tackling protectionist barriers affecting exports, at an interactive session with exporters and EPC chiefs organised by the Federation of Indian Export Organisations (FIEO), eastern region, he said these have to be negotiated both at the WTO as well as bilateral levels through joint business fora.

Favouring export-linked FDI policy, as part of an overall strategy to minimise the impact of NTBs, as foreign investors too have to adopt similar standards, Mr Prasad strongly recommended FTAs (Free Trade Agreements) with strategic partners to avoid NTBs , WTO-compatible incentives for testing, certification, labelling, etc., related to environment. In the case of tobacco export, for instance, he said there was need to examine why there was a slump despite India being so competitive in this field. Export -linked MNC investment in this area, he felt, may help avoid NTBs.

According to him, there was an immediate need to list out all NTBs against India, examine whether these are WTO-compatible or not, related to which Article of WTO and the action taken by other countries in similar cases. The update on NTBs is precisely f or this purpose -- negotiations at WTO and other levels and for internal policy -- he pointed out.

Suggesting that any obstacle imposed by a country on its imports other than customs duty (tariff) was a NTB, he said this could include quotas, tariff quotas, seasonal tariff, low and high rates, import monitoring and non-automatic licence to protect hum an and plant health, human safety, etc.

In the case of the US, India's largest trading partner, some of the non-tariff measures are said to be needless supplementary documents and information sought by the US customs during clearance, especially for garments with an outer shell of more than on e construction or material.

Some of the other issues are excessive fees for customs, harbour and other facilities, turtle safety device for shrimp trawlers, labelling for parts of passenger cars and labour department certification for industrial fasteners.

In the case of ER, Mr Prasad said barriers are faced with regard to need for labelling to indicate recyclability or reusability, maximum limit of aflaltoxin and eco-labelling for washing machines, dish washers, etc.

Similarly, the Technical Barriers to Trade (TBT), he pointed out, may go beyond international standards. A case in point is the Nutrition Labelling and Education Act of US, which requires certain products to be labelled regarding their contents. He said these Rules are believed to differ from the international standards on labelling established by the Codex Alimentarious.