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Shri Kamal Nath, Union Minister of Commerce and Industry, has said that India will resist pressures for any new form of protectionism in the world textile trade following the phase-out of quotas under the multi-fibre arrangement (MFA) and the expiry of the Agreement on Textiles and Clothing three weeks from now, with effect from 1/1/2005. Addressing the India economic Summit Plenary Session on International Trade: A New Voice of Emerging Markets, organised by the CII and the World Economic Forum here this evening, Shri Kamal Nath sounded a note of caution on the post-MFA scenario, saying that "the expiry of Agreement on Textiles & Clothing three weeks from now does not ensure that protectionism will disappear from that date. While developing countries poise themselves to fully exploit the opportunities that will open up before them, there are forces at work to negate this of course, we shall not allow it. There is a need to consolidate gains achieved thus far and be vigilant on the emerging trade policy conditions to collectively resist pressure for any new form of protectionism in this sector".
On foreign direct investment (FDI), Shri Kamal Nath emphasised that India welcomed FDI both as a source of capital as well as a vehicle for technology transfer. "The scarcity of capital in developing countries is of course there – but what is an even more cogent reason for welcoming FDI, in my opinion, is the fact that FDI is a major source of skills upgradation and technology transfer. I am a firm believer that technology alone can enable developing countries to do the ‘catching up’ that could leapfrog them into the frontiers of progress", he said. Stating that India was both demandeur of technology as well as a supplier of it, Shri Kamal Nath announced that government was in the process of preparing a new Technology Transfer Policy, aimed at attracting the state-of-the-art technology.
Referring to issues that concern India in the WTO, Shri Kamal Nath said these included the multilateralism vis-à-vis regionalism debate, the issue of distortions in international trade, especially agriculture, emergence of non-tariff barriers to occupy the space being vacated by tariff barriers on account of the implementation of Uruguay Round commitments by countries, issues relating to tariff peaks and tariff escalations and access restrictions on services export, among other things.
Underlining the India’s comparative advantages in the Services sector, Shri Kamal Nath said "there is need to enable service providers to supply services in overseas markets either from remote locations (Mode 1) or through the temporary movement of service personnel (Mode 4). We shall be working towards this in the ongoing WTO negotiations". The political backlash against outsourcing in developed countries was misplaced, he said, adding that "this signals an inclination to protectionism which is unfortunate".
"India attaches prime importance to the multilateral trading system… but we also see a role for regional FTAs…. We hope SAFTA (SAARC Free Trade Area) will come into existence from 1st January, 2006…. The negotiations for a Preferential Trade Arrangement (PTA) with Mercosur countries of Latin America are complete…… We also hope to have something with SACU (Southern African Customs Union) of South Africa in the near future", he said.
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