India seeks easier norms in trade pact with developed nations

India has said the trade facilitation agreement proposed by developed members of the World Trade Organisation for infrastructure upgrade at customs and ports cannot be binding and has to be softer on developing nations.

It also needs to be balanced with pacts in areas that favour poorer countries such as elimination of cotton subsidies and extension of compliance deadline for intellectual property agreement for Least Developed Countries (LDCs).

“It is important for developing countries to be given a longer time frame to implement an agreement on trade facilitation as it would require changes in laws and a complete over-haul of port and customs infrastructure,” a Government official told Business Line .

A trade facilitation agreement could cut down trade costs by 10 per cent, as per estimates made by the WTO.

Since extension of electronic clearance facilities and e-computing would also entail huge investments, poorer countries need to be given monetary and technical support, New Delhi argued.

With the decade old Doha round of trade talks at the World Trade Organisation not reaping results, some members are looking at carving out pacts in select areas such as trade facilitation and services during the ministerial meet in Bali in December.

In a recent meeting on the issue at the WTO, India’s representative spoke against making the pact mandatory.

“If the agreement becomes binding, developing countries will be taken to dispute if there is a lapse in implementation and be penalised. This is not acceptable,” the official said.

While the pact is acceptable to India in parts, a number of proposals like providing for advance ruling or a pre-determination of the import tax burden and allowing bank guarantees in lieu of cash duty payments were difficult to implement.

“We have said that there should be a tiered formula which allows developing countries to implement the agreement in parts,” the official said.

As the pact will essentially benefit developed countries as the volumes of their traded goods is much more than the rest of the world, it needs to be balanced off by agreements in areas of interest to developing countries and LDCs.

“We have proposed that a number of other agreements should be signed at the Bali ministerial including one on cotton subsidies, LDC waiver in services and IP extension,” the official said.

amiti.sen@thehindu.co.in

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