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Shri Kamal Nath, Union Minister of Commerce & Industry, is scheduled to address a stakeholder consultation Workshop on “Pre-Hong Kong Ministerial Meeting Consultation: Non-Agricultural Market Access Negotiations (NAMA)”, which is being jointly organised by the Ministry of Commerce & Industry (Department of Commerce) and UNCTAD, here on June 28, 2005. The Workshop assumes significance as the month of July 2005 has been set as a marker in the process of negotiations, to be able to judge across the board whether the negotiations are on course for a significant outcome at the Hong Kong Ministerial Meeting in December 2005.
The focus of the one-day Workshop will be to inform participants of the current state of play at the World Trade Organisation (WTO) regarding NAMA negotiations and discuss issues relating to impact of tariff liberalization and trade adjustment costs on certain important sectors in the country with a view to providing stakeholders’ inputs in India’s approach in the ongoing negotiations. The Workshop will bring together representatives from civil society, consumer organizations, experts and policy makers involved in this field.
Background
Discussions in NAMA negotiations have mainly centered around the modalities for tariff reduction, sectoral initiatives, treatment of unbound tariff lines and non-trade barriers. A variety of approaches to tariff reduction have been suggested by different countries. The developed economies including the US, the EU and certain APEC countries support the “Swiss Formula”* for reduction of tariffs on industrial goods. On the other hand, Argentina, Brazil and India proposal has suggested a tariff reduction formula based on the average tariffs of members.
The growth rates of developing countries have been a point of discussion in major international fora and the media. Developed countries are placing increasing demands on the developing countries to play a leadership role in making significant tariff concessions, in light of such projections. These demands are likely to be substantiated by studies highlighting the gains from tariff liberalisation for developing countries. On the other hand, some of the developed countries appear reluctant to open their markets to imports from developing countries. In taking a decision on the modalities the developing countries would need to be mindful of the impact of tariff liberalisation on their economy as a whole. India has been following a policy of autonomous liberalisation for the last several years, consistent with India’s national interests.
There is a need for developing countries like India to synchronise their increasing international role with the social realities within the country. Given the likely adjustment costs of trade liberalisation, it is essential for developing countries to strike a balance which maximises their gains in sectors of crucial importance to them, while limiting the adjustment costs. Developed countries often have relatively low average tariffs, but this conceals the fact that they keep very high tariffs on certain products, particularly on those of key export interest to developing countries. For example, bound tariffs on textiles and clothing, leather, rubber, footwear and travel goods, transport equipment and fish and fish products are higher than those on other industrial products, says UNCTAD.
* The “Swiss Formula” is a special kind of harmonising method narrowing the gap between high and low tariffs. It uses a single mathematical formula to produce a narrow range of final tariffs form a wide set of initial tariffs and a maximum final rate, no matter how high the original tariff was.
SB/MRS
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