The Hindu Business Line : EU says market access strategy a success

The European Union (EU) has declared that its reinforced market access strategy launched in early 2007 is a success, claiming that in its very first year it has removed trade barriers in its key trading partners such as Brazil, India, Japan and Russia.

In a communiqué issued in Brussels, the European Commission has contended that European exporters of farm goods to Argentina, cars to Pakistan, and wines and sprits to India have all seen their export conditions significantly improved through the work of market access teams in those countries.

Medley of taxes

EU cited the case of how it had used a WTO panel “to force India to reform a discriminatory tariff regime of imported European wines and spirits”.

It did not spell out how India had to slash tariffs on spirit and wines.

The Finance Ministry in early July last year withdrew the additional customs duty on imported wines and spirits in a bid to resolve the impasse with the EU and other leading trading partners over high duties.

A European Commission study had reported the medley of taxes and duties in some States in India was as high as 550 per cent on imported spirits and 264 per cent on wines, though basic import duties on wine and spirits were 100 per cent and 150 per cent, respectively.

Duty hike

A terse Finance Ministry statement in July 2007 said the Government had decided to withdraw the additional customs duty on imported wines, spirits and liquor, but hiked basic duty on wine to 150 per cent.

Despite these adjustments in duty rates by the Union Government on wine and sprits, the EU maintains in its latest reinforced market strategy report that the Indian market for wines and spirits is one of the largest in the world, worth millions of euros every year for EU exporters, and hence, “it matters.”

Similarly, in June 2007, the EC persuaded Pakistan to exempt imported motor vehicles from the payment of Capital Value Tax (CVT) with immediate effect as Pakistan is a growing market for EU vehicle exports.

The removal of CVT was “a real and tangible improvement for EU automobile exports to Pakistan,” the EU said.

Amplifying its strategy for removing market barriers, EU said since early last year, the new strategy has beefed up the network of market access experts in key EU markets in Asia and Latin America, focussed on concrete problems that EU companies face by setting clear priorities on which barriers and markets matter most and made more information available for EU traders on the extant market access databases which provides business with a snapshots of barriers in key markets.