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The National Seminar on TRIPS-CBD and Subsidy Issues in the WTO is being held here today to discuss important issues which relate to implementation of WTO Agreements and are of great relevance to developing countries including India. The Seminar has been jointly organised by the Ministry of Commerce & Industry and UNCTAD (United Nations Conference on Trade and Development) as part of the stakeholder consultations in the context of the forthcoming Ministerial Conference of World Trade Organisation (WTO) scheduled to be held in Hong Kong during December 2005. Shri Prodipto Ghosh, Secretary, Ministry of Environment & Forest, delivered the keynote address at the Seminar which had various technical sessions which were chaired by Shri G.K. Pillai, Additional Secretary, Department of Commerce; Shri Anthony de Sa and Shri Rajeet Mitter, Joint Secretaries in the Ministry of Commerce & Industry (Department of Commerce) and Shri Harsha Vardhana Singh, Deputy Director General/WTO-designate.
Representatives of trade and industry, civil society, experts and policy makers participated in the day-long consultation which saw in-depth discussion on three of the outstanding Implementation Issues in the WTO.
Prior to the Seattle Ministerial meeting of the WTO, a large number of developing countries had raised issues relating to deficiencies and imbalances in WTO agreements. These are commonly referred to as Implementation Issues i.e., developing countries’ problems in implementing the WTO Agreements. While some of the Implementation Issues raised by developing countries have been addressed, most of the commercially important issues remain outstanding.
Finding a solution for implementing the TRIPS* Agreement and the Convention on Biological Diversity (CBD) in a mutually consistent manner has been at the core of discussions in WTO’s TRIPS Council for the last four years. India and other countries with significant biological diversity have made their submissions to bring about a mutually supportive resolution between the objectives of the TRIPS and the CBD. Developing countries are particularly concerned about the need to prevent what they call “bio-piracy” and to obtain fair returns on the products based on their “traditional knowledge”. In fact access and benefit sharing are important tenets of the CBD, but are not explicitly recognized by TRIPS. To find a solution to this problem would also be intrinsic to fulfillment of the development objectives of the Doha Development Agenda.
The two issues relating to WTO’s Agreement on Subsidies and Countervailing Measures (ASCM) are particularly important from the perspective of India’s exports. These relate to inclusion of capital goods in the definition of inputs consumed (Footnote 61) and export competitiveness (Articles 27.5 and 27.6). These two issues were discussed earlier at the WTO in the context of Implementation Issues, but no final decision could be taken.
The ASCM permits remission, exemption or deferral of customs duty and other indirect charges levied on inputs consumed in the production exported products. However, under the existing provisions of ASCM customs duty concessions on capital goods used in the production of export products can be subject to countervailing duties by importing countries. In certain cases countervailing duty in excess of 8 percent has been imposed on India’s exports, eroding their competitiveness. It would be in India’s interest to argue for permitting concessions being granted on imported capital goods used in the production of the exported product, without these concessions getting countervailed by the importing country.
Developed country markets are usually the largest export markets for the developing countries. The loss of a developed country market takes on a huge and oppressive dimension in the context of the developing country member’s export effort. Thus, imposition of countervailing duty on Indian exports raises the costs for the importer, who may then source his requirement from other countries. This also has the effect of not only reducing India’s exports, but also results indirectly in adverse impacts on production, employment and poverty alleviation.
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