The Hindu Business Line : Where world is not fragmented by narrow domestic walls

THESE DAYS, all roads have been leading to Athens, for sports-lovers. And for economists, for whom the topic of recent discussion has been inflation, all clicks have been leading to http://eaindustry.nic.in.

That is the Web site of the Office of the Economic Adviser to the Government of India, Ministry of Commerce and Industry, which posts the latest Wholesale Price Index numbers. However, I am interested in something else from the Economic Adviser, Dr H. A. C. Prasad: His new book Market Access for Exports from India, published by Academy of Business Studies (www.worldtradescanner.com).

"A serious attempt to look at the ongoing WTO negotiations from the Indian perspective," notes S. Narayanan, in his foreword.

To know what is `ongoing', I visit www.wto.org, and top on news is that the deadlock of the Cancún Ministerial Conference has now been broken after "a non-stop session involving key ministers and ambassadors, that began at 5 p.m. on Friday, 30 July and lasted almost 24 hours." Hey, it seems they are working harder than our Finance Ministry officials and truckers. And one thing is clear: `World trade' is not a drab subject for a post-graduate commerce course but a happening topic.

Three major areas of negotiations in the WTO relate to industrial (a.k.a. non-agricultural), agricultural and service sectors of the economy. "The market access for India resulting from negotiations at WTO in the three sectors and the necessary policy changes to accelerate exports in these sectors will have a bearing on our goal of achieving an overall growth rate of 8 per cent," states the preface.

Current total exports of goods and services of India is around $100 billion, with merchandise accounting for almost 60 per cent. It can easily double to $200 billion, assures Prasad, because the present level of exports accounts for only 15 per cent of GDP. "Market access for Indian exports is greatly affected by the tariff and non-tariff barriers (NTBs)," he rues. "The more competitive we are in a particular item, the greater are the barriers." An illustrative list summarises the NTBs: `Buy American' provisions to promote US-made iron foundry products. Delayed lab test reports in the EU; also, labelling to indicate recyclability. In Japan, 7 vitamins are considered as food, with increased restrictions; and there are impediments in accessing Japan's distribution channels.

To export tyres to Brazil, you must put `En-Metro' marking. Tanzania bans entry of jute bags weighing less than 1.7 kg; to promote its indigenous sisal bag industry, cashew exporters there have to pack only in sisal bags.

Egyptian standard is in Arabic and first, you have to decipher the language before understanding the barrier. "India's engineering exports suffer because of Mexico's stringent quarantine requirements on wooden packing."

One tends to remember the line in Gitanjali where Tagore dreams of a world that world has not been broken up into fragments by narrow domestic walls. But here is more to delay such a wish: Patents are obtained for medicinal plants in countries such as the US, the EU and Japan "just to block Indians from manufacturing the item." Jordan, Lebanon and Azerbaijan impose "stringent registration procedures" for pharma items. The American Automobile Labelling Act stipulates that all passenger cars and light trucks carry labels "indicating domestic content percentage of value added in the US and Canada". France imposes the requirement of 98 per cent assembly in France for bicycles.

If that makes you wild, know that Indian buffalo is considered `wild' by a few countries, something endangered. Or, this can make you rise: "While importing non-basmati rice, Indonesia allows up to 25 per cent broken rice from countries such as Thailand, China and Vietnam, while it allows only 15 per cent in the case of Indian rice."

World exports of commercial services in 2003 amounted to $1.76 trillion, "nearly two-thirds contributed by the US, the EU and Japan." Our share in commodities was only 0.73 per cent, and in commercial services, somewhat better, at 1.4 per cent. Remember that the services import bill of the big players reserves a big chunk for `transportation and travel' and a bigger one for `business and financial'.

When it comes to negotiations, you need data to put on the table. In services, data issues pose a big disservice, because measurement is difficult. Yet, it is important to build up a sound database on services trade that is globally comparable, argues Prasad.

Even as services contribute in increasing measure to the taxman, export promotion councils and exporter associations are not common, but for a few exceptions. And we don't have a Minister for Services, do we?

The more one reads about international trade, be it in goods or services, agri or non-agri, the more it looks like a fiercely competitive sport, with its own mesh of rules and human referees, and where politics can be more visible than in the flags that cheer from the galleries. What is needed, as Prasad puts it, is "not only hard and systematic work, but also some quick and unconventional decision making." So, for a change, we can vault beyond the WPI and see what the WTO means for us.

Economics@TheHindu.co.in