Financial Daily from THE HINDU group of publications
Sunday, Dec 05, 2004
Industry & Economy
`Entry barriers need to be lowered for developing nations'
Chennai , Dec. 4
DEVELOPED countries need to be more sensitive to the needs of developing countries in multilateral negotiations or these will hit an obstacle and give way to regional trade negotiations, according to Dr S. Narayan, former economic advisor to the Prime Minister.
Addressing a seminar on `Issues before the developing countries: WTO talks and its implications,' organised here by the Indo-Italian Chamber of Commerce and Industry, he said in the last couple of years, over 300 free trade agreements had been put in place and this was not a good sign.
The international community must recognise the differences in earning capacity of a developing country and a developed one.
For instance, India's share of world trade is less than 1 per cent against developed countries' 50 - 60 per cent. Entry barriers need to be lowered for developing countries, which are facing a greater rate of reduction of trade barriers.
The UN's millennium development goal stresses that increasing trade contributes more to poverty eradication than aid, he recalled.
In India, with 450 million people dependent on agriculture, the livelihood of millions of people is tied to each commodity.
While there are over 200 - 250 items on the sensitive list for which imports are restricted, India will have to bring down the number. If it comes down by 100, a 100 million would be affected.
This is not an international issue but a domestic one, where the Government has to provide them the technology and livelihood to cope.
"Developed countries need to understand the sacrifices made by developing countries," he said.
India is putting in place a TRIPS-compliant intellectual property legislation, which will enable product patent in 2005. But manufacturers in developed countries were making too much of a `song and dance' about some provisions in the legislation. But the IPR issues had been brought under the purview of the WTO only during the course of negotiations because developed countries felt that the markets in developing countries were cordoned off.
Mr Stefano Gatto, Counsellor (Trade and Economic), Delegation of the European Commission to India, said the EU like India was not for total liberalisation of agriculture.
The framework agreement of August 2004, which deals with domestic support for agriculture, exports subsidies, market access and special and differential treatment, represents a reasonable system to work with. It addresses issues of limiting domestic subsidy and elimination of export subsidies.
Developed countries too have had to make sacrifices on bringing down tariffs. The EU has arrested agriculture subsidy despite the increase in the number of member countries. Issues such as non-tariff barriers need to be addressed particularly those relating to sanitary and phyto-sanitary conditions.
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