India needs to show flexibility in trade facilitation stance: WTO chief

SME Times News Bureau, January 30, 2013

India needs to show flexibility in its stance that trade facilitation should not be de-linked from other developmental aspects of the Doha Round, said the World Trade organization (WTO) Director General, Pascal Lamy on Tuesday.

“Improving trade facilitating related infrastructure and services such as border trade procedures and ease of transit of goods by way of simplified and speedy customs norms would increase the volume of international trade significantly and certainly not throw Indian farmers and taxi drivers on the streets,” Lamy added in a special address on `WTO and Multilateral Trading System: The Way Forward to Bali Ministerial`, organized by FICCI and CUTS International in New Delhi.

He said the multilateral, ruled based trading system would benefit greatly if the issues related to trade facilitation, regulations on agriculture and LDCs issues are agreed to at the Bali Ministerial meeting in December this year.

A consensual agreement on these three issues could then be dovetailed into a working programme post-Bali to get close to a successful conclusion of the Doha Round, he mentioned.

Lamy also said that to arrive at a true measure of the volume of world trade and get a real picture of who benefits from international trade there is a need to estimate the value addition done by an importing country on the product that it finally exports.

Countries that export the most are also the ones that import the most. Countries that value add 30% of the GNP to the imported products for export are China, Germany, Singapore, Chile and New Zealand while at the second rung of 15% value addition come India and Japan. The US, the largest economy in the world, falls in the third category of 10% or less, he added.

According to an Asia Pacific Economic Cooperation (APEC) study, clearing the red tape at country borders would generate approximately twice as much gain to GDP than tariff liberalization would. Trade facilitation measures, it is pointed out, would particularly benefit developing countries, where the inefficiencies are sometimes more costly to industries than are tariff barriers, Lamy pointed out.

Also, Rajiv Kher, Additional Secretary, Ministry of Commerce and Industry and India`s Chief negotiator at the WTO stated that it was important to remember that the Doha Round was a development round and trade that is not conducive to development will only serve to push a mercantile agenda, leaving the concerns of the poor countries unattended.

He called for realism on the part of developed countries and urged them to shed their insistence de-link discussions on trade facilitation with results in the more contentious subjects of agriculture and industrial tariffs.

India was not against trade facilitation and does not see it as a measure contrary to international trade. But positioning it a stand-alone proposal without adequate balance between what the developing countries are giving and what they are getting would not serve the cause of multilateralism, he added further.

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