Date:05/09/2008 URL: http://www.thehindu.com/2008/09/05/stories/2008090559810500.htm

Tamil Nadu - Chennai

“Safety net needed after cut in tariff on industrial goods”

Special Correspondent

— Photo: K. PIchumani

ELABORATING HIS VIEWS: Rajan Sudesh Ratan, professor, Centre for WTO Studies, IIFT (right), with Bipin Menon, Deputy Secretary, Trade Policy Division, Department of Commerce, at an interactive session in Chennai on Thursday. M. Rafeeque Ahmed, past president, FIEO, is in the picture.

CHENNAI: India can mitigate the adverse impact of the reduction in the tariff on industrial goods by designing an appropriate safety net, M. Rafeeque Ahmed, past president of the Federation of Indian Export Organisations (FIEO), said on Thursday.

Delivering the welcome address at an interactive meeting on the WTO Non-Agricultural Market Access (NAMA) sectoral proposal here, he said at present India’s economy did not face any foreign exchange shortage, so the country must leverage NAMA negotiations to create jobs through trade expansion.

Swiss formula

“Given the relatively high level of NAMA bound tariffs in India compared with develop countries, tariff reduction through the non-linear Swiss formula will require India to make deeper tariff cuts than the developed countries. Thus, India will have to reduce its bound tariffs that exceed the corresponding number for the developed countries. Herein lies the imbalance in the possible outcome of the NAMA negotiations for India,” he said.

Mr. Ahmed said that while the developed countries preferred the Swiss formula, known to cut their tariff steeply, Argentina, Brazil and India suggested a different formula.

Bipin Menon, Deputy Secretary, Trade Policy Division, Department of Commerce, said India, along with China, virtually stalled the entire agri-development initiative chalked out in Geneva. “Unless we are able to protect the livelihood of our farmers and farm workers, it is pointless to get into the deal.”

The Doha round was aimed at reducing or eliminating tariffs, including tariff peaks, high tariffs, tariff escalations and non-tariff barriers, on the non-agricultural goods in particular, and all products of export interest to the developing countries. He asked all stakeholders to give their feedback within 30 days for devising future plans.

Rajan Sudesh Ratan, professor, Centre for WTO Studies, Indian Institute of Foreign Trade, said the interactive seminars were aimed at giving suggestions and ensuring necessary safeguards for various stakeholders.