India proposes changes in trade pact at WTO Bali meet

NEW DELHI: India has proposed changes in the trade facilitation agreement to address the concerns of developing countries in the proposal that tops the agenda of the WTO’s Bali ministerial scheduled for early December.

The trade facilitation agreement aims to smoothen cross-border trade by removing red tape, improving infrastructure and harmonising Customs procedures. Seen as the developed countries’ agenda, the emerging economies have sought relaxations in the legally binding clauses like clearing shipments within three hours.

“We have informed WTO that there needs to be some restriction on the scope of expediting shipment, and should be only limited to air cargo and that too very urgent ones,” a commerce department official told ET.

The country should also be allowed to restrict it to courier services, as the ones very urgent.

WTO has subsequently agreed to relax the clause to make expediting shipments within six hours or as rapidly as possible instead of three hours.

Negotiators from 159 countries have held several rounds of talks since September in Geneva to forge a consensus on the multilateral agreement.

Although talks started in 2001 in Doha, lack of consensus between the developed and developing countries has lead to an impasse.

The ninth ministerial round in Bali is being seen as the last attempt to renew the global trade agreement agenda by focusing on the low hanging fruit such as trade facilitation.

India’s commerce & industry minister Anand Sharma told WTO director-general Roberto Axevedo during his Delhi visit in October that India was in support of the trade facilitation agreement, “but needs a balance in the pact”.

India along with other developing countries had raised objection to the clause, which calls for a sufficient time gap between the announcement of change in tariff to its coming into effect. This would be against India’s constitution, since most of the budget announcements related to tariffs come into effect within 24 hours. “We cannot change our constitution for WTO,” said the official, adding that India has submitted an alternative proposal to this effect, wherein, budget-related announcement should be kept out of this clause since they need to become applicable immediately. “Deliberations are still on, we need to be given flexibility,” he added.

Besides, India has sought a binding agreement on Customs cooperation under trade facilitation, which will ensure mandatory exchange of information between Customs administrations (on request) so as to prevent under-invoicing, overvaluation, tax evasion and illicit capital flows.

However, the developed countries want to agree to it only on ‘best endeavour basis’. “It is important for us, and has been on the table for over 20 year. It is only for cross checking, as information is available at both ends. However, developed countries are putting in so many conditions, confidentiality laws, secrecy. So, we are not sure in what form it will finally look like,” said the official.

India has also been pushing for a binding technical and financial assistance by the developed countries to the developing countries to accept TF agreement.