The Hindu : India critical of QRs at WTO trade review

Online edition of India's National Newspaper
Saturday, Jun 29, 2002

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India critical of QRs at WTO trade review

By Sushma Ramachandran

NEW DELHI JUNE 28. India has severely criticised the imposition of quantitative restrictions (QRs), especially in textiles, by developed countries as being among the most important non-tariff barriers affecting its trade.

In its report on the Trade Policy Review carried out by the World Trade Organisation (WTO), the Indian Government said that new tariff barriers faced by Indian products in overseas markets were severely constraining the country's exports. These include restrictive import policy regimes, standards including phytosanitary standards, export subsidies, barriers on services, government procurement regimes and other barriers such as anti-dumping and countervailing measures.

The comments on the hurdles to trade have been appended to the main report on India's trade policy review by the WTO secretariat. The WTO review had lauded India for its economic reform programme, which resulted in strong economic growth throughout the 1990s despite external shocks.

The Indian authorities, in their policy statement, pointed to the numerous impediments to the growth of its international trade. Quantitative restrictions, especially in textiles, were one of the most important of them. The integration programme implemented by the importing countries on textiles had not been in line with the spirit of the Agreement on Textiles and Clothing though it may have conformed to the narrow technical and legal requirements of the agreement.

In the first stage commencing on January 1, 1995, major restraining countries did not integrate any product under restraint for India and the integration of restraint products had been negligible in the second and third stages. The result: even in the tenth year of the transition period, over 95 per cent of the country's apparel and yarn trade would remain un-integrated with some of its major trading partners. Besides, the integration schedules had a greater concentration of low value added products. It was, thus, obvious, the note said, that the major importing countries continued to backload the integration process and the bulk of integration would take place only at the conclusion of the transition period.

Another problem in textiles exports was the unilateral changes introduced by certain trading partners in their rules of origin. These had adversely affected the export of textiles and India's rights under the ATC including full utilisation of quota. Repeated anti-dumping investigations on textile products such as cotton fabrics and bed linen in which the country enjoyed a comparative advantage, had a debilitating effect on the Indian textile industry and exports. The ban on use of azo dyes had also affected textile exports.

Yet another area of concern on market access for textiles is an increasing tendency to enter into bilateral pacts for conferring selective liberalisation of quotas. The tariff preferences had also been extended bilaterally which were otherwise meant to be provided to all developing countries on a non-reciprocal basis.

There is a growing regionalisation of textile trade owing to formation of free trade areas and preferential trading arrangements. It is estimated that 59 per cent of world trade in textiles is at present taking place under RTAs and this is adversely affecting the country's textile trade. Highlighting the non-tariff barriers affecting market access, the Indian Government noted that in agricultural products there were barriers to export mangoes and other fruits owing to insistence on use of only the vapour heat treatment procedure. Sanitary and phytosanitary standards were affecting products such as flowers, milk products, meat.

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