The Hindu Business Line : `Non-tariff barriers must be transparent'

"With steady decrease in tariffs the world over, NTBs have become the chief instrument of regulating trade. The common objective is to limit imports."

Mr Kamal Nath

New Delhi , Aug. 4

DEVELOPING countries remain vulnerable to non-tariff barriers (NTBs) and as such, these should be transparently and openly arrived at and fairly and justly implemented, according to the Union Commerce and Industry Minister, Mr Kamal Nath.

Speaking at the National Conference on NTBs for Indian exports — Critical inputs for the WTO negotiations, organised by the Confederation of Indian Industry (CII) here on Thursday, the Minister deplored the tendency among countries to use NTBs as the trade policy of choice.

"With steady decrease in tariffs the world over, NTBs have become the chief instrument of regulating trade," he said, adding that developed countries use "sophisticated methods while less developed countries have more straight-forward NTBs — but the common objective of all these is to limit imports." Stating that NTBs affect all kinds of products, the Minister said that they seem to be "a magic ingredient that suddenly converts perfectly good products into unexportable commodities." He illustrated this by stating that mangoes that are tasty and healthy when eaten here, "all of a sudden become inedible once they cross the Atlantic or the Pacific oceans!"

Mr Nath said that what is "intolerable is when these measures place unreasonable demands on traders which they cannot meet, or when they drive up costs of products with the specific aim to make them uncompetitive in the importing markets." He said non-tariff barriers are not merely restricted to sanitary and phyto-sanitary (SPS) requirements.

While standards seem a reasonable thing to have, as it is an issue of particular importance to us, Mr Nath said that the matter seems to shoot off in a dozen different directions.

"Unsatisfied with just fixing standards, the question is raised of harmonisation of standards; one is barely coping with that when one witnesses a slew of `revision of standards,' mostly upwards and at regular intervals, making it difficult for developing countries to adapt to the changing requirements."

Pointing out that "testing issues" have become another problem, Mr Nath quipped thus: Just the act of testing whether a particular product meets the standards or not is becoming an NTB itself."

Mr Nath said the cost of testing becomes disproportionately prohibitive, particularly for traders in developing countries. He said not satisfied with rejecting consignments, customs authorities of some countries resort to destroying them and such destruction of allegedly contaminated or damaged export consignments is another problem.

He added that often the alleged problems could be solved with minor re-processing, but hasty destruction results in huge loss, especially for small exporters.

Dwelling at length on some eerie example of how "peculiar and creative forms of NTBs keep cropping up," Mr Nath said in the US ports, for instance, the Customs authorities have begun demanding that Indian shrimp exporters provide bank guarantee against the possible imposition of anti-dumping duty. Terming this is as `preposterous,' the Minister said that even if there is no anti-dumping duty yet imposed, the poor exporter had to bear the added cost of providing a bank guarantee against even the possibility of an anti-dumping duty.

Mr Nath said registration mechanisms, which are not transparent, are used to discriminate against products only from certain countries.

"We have noticed that particularly in the case of pharmaceutical products such discriminatory policies are pursued through non-transparent registrations mechanisms," he said.

The Minister said that if there are some NTBs, which India had imposed and which came in the way of imports of certain raw materials, which we might require for our development, "I would be happy to consider removing these."

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