India to oppose facilitation steps by developed nations

NEW DELHI: India will strongly object to trade facilitation measures proposed by the developed countries that will be debated by the World Trade Organisation ministerial meeting in Bali in December.

New Delhi will argue that guised as measures to cut inefficiencies in trade, actually these will take away the emerging economies freedom to revise tariffs should they face import surges and also impose heavy costs on them.

"They want to replicate their own trade laws and procedures on others in order to gain market access through import facilitation in developing countries and LDCs," said a commerce department official. The trade facilitation measures will require countries to improve the entire ecosystem of foreign trade - infrastructure at borders, standardise procedures and rules and harmonisation of paperwork.

The measures are aimed at making international trade efficient by cutting delays at borders, high fees, cumbersome procedures and non-standardised rules. The developing countries, including India, fear these measures could lead to revenue outgo and also burden countries with enhanced funding requirement for building infrastructure.

Rajiv Kher, additional secretary, department of commerce, said: "While the draft text of the trade facilitation pact needs to take into consideration the resources available with countries to take measures to improve infrastructure, more weight needs to be given to concerns of developing countries like India that are more interested in facilitating exports than imports."

A recent OECD paper has argued that the costs of implementing trade facilitation measures are not so high, pitching it as investment that will boost revenues.

The Indian government is also opposed to the mandatory advance ruling for all traders that is included in the proposed trade facilitation measures. In India advance ruling is available to only certain class of traders. Making it available to everyone may be tough for developing countries due to limitation of resources, India feels.

There are concerns on some other elements such as the legally binding obligation on release of expedited shipments within three hours. India is against inclusion of electricity grids and petroleum pipelines in the definition of traffic in transit. It would mean allowing other countries to use India's infrastructure for supplying petroleum and electricity to another country.

New Delhi, however, strongly supports condition to make it mandatory for countries to return the rejected consignment to the exporter, instead of the current practice of destroying goods. Indian exporters have been facing destruction of their rejected consignments at the EU custom ports.