The Hindu Business Line : WTO trade facilitation talks: `Address concerns of exporters in developing countries'

THE ongoing negotiations in the World Trade Organisation (WTO) on trade facilitation must address the concerns of exporters in developing countries since the current conditions suggest strong handicaps for the developing world, the Union Minister of Commerce & Industry, Mr Kamal Nath, said.

In his message read out at the National Seminar on Trade Facilitation here, jointly organised by the Department of Commerce and the Unctad-India, Mr Kamal Nath said reduced transaction costs at borders would give a competitive edge to industry and also improve the country's attractiveness as a destination for foreign direct investment (FDI).

"We look upon these negotiations as an opportunity to review our domestic procedures and bring about autonomous improvements, wherever necessary. We are active participants in the trade facilitation negotiations. We have recently filed a joint paper with US in an area of high concern to us — namely to evolve an effective cooperation mechanism between customs administration to deal with issues concerning violations of customs law."

Sounding cautious on the outcome of the ongoing negotiations, the Minister said "while we must relentlessly reform ourselves we cannot afford to take any commitments in WTO that have the potential to adversely affect the core functions of safeguarding revenue and security. Similarly, we need to be cautious that commitments should not be such that they put unsustainable additional resource burden on us".

The Minister said, "Our hope and endeavour would be that the final outcome of these negotiations would be a win-win for India and for the world trading system as a whole".

In his inaugural remarks, the Commerce Secretary, Mr S.N. Menon, said that from the very beginning India was of the view that trade facilitation, being part of the WTO negotiations, would be good for the country as it was imperative to have an agreement which would enable ushering in a system that would bring transparency and reduce transaction cost to facilitate exporters, importers and all others engaged in international trade.

In her remarks, Dr Veena Jha, India Coordinator, Unctad, said trade facilitation, especially port charges, delays and freight costs remain significant constraints to exports and the availability of adequate transport and logistics infrastructure and management greatly affects market delivery of products. She said that though improvements have been made on this front in India, an Indian exporter must still complete 29 documents, make 118 copies and get 258 signatures. Sub-standard trade facilitation raises costs, restricts trade and reduces income and employment, she warned.

Stating that trade facilitation should be a top development priority, Ms Jha said that at the request of the Department of Commerce, Unctad had commissioned a study on various aspects of trade facilitation, including problems plaguing Indian exporters. For instance, customs clearance for sea cargo takes on average 2.1 days in developed countries and 4.8 in East Asia and the Pacific. But traders in Latin America and the Caribbean must wait up to 9 days and those in Africa and South Asia 10 days.

The study highlighted that trade facilitation inside India was a bigger problem than outside. Costs associated with inter-State transit of goods, excessive documentation, frequent changes in regulations and notifications, pre-shipment certification, queuing time at customs, difficulties faced in getting minor amendments, delays/harassment for obtaining export incentives such as duty drawback have been identified as being much more significant than problems encountered after the export of goods.

She said that problems at export destinations tend to be concentrated mostly in agricultural, meat and food products and to an extent in textiles/garments and miscellaneous handicraft products. These arise due to the absence of harmonisation and equivalence in national technical standards and procedures in case of agriculture, meat and food products and errors in tariff classification for other products, especially when imported under preferential terms.

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