INDIA SEEKS LEVEL PLAYING FIELD IN TRADE FOR DEVELOPING COUNTRIES
Date : 17 Jun 2004
Location : New Delhi
India has said that the rules of the international trading system, both in terms of intergovernmental arrangements as well as operation of international markets, must ensure fairness and guarantee a level playing field for developing countries while taking into account their special needs and limited capacities in comparison with developed country partners. A statement in Sao Paolo yesterday on behalf of India read out by India’s Ambassador and Permanent Representative to the UN in Geneva, Mr. Hardeep S. Puri, at the UNCTAD XI Interactive Plenary on "Assuring Development Gains from the International Trading System and Trade Negotiations", said that developing countries needed greater flexibility to use development policy instruments best suited to their national conditions and the trading system must accommodate this policy space imperative.
Spelling out the other cardinal principles that are indispensable for assuring development gains, the statement said that – 1) There should be genuine liberalisation by the major trading partners of developing countries in the pro-development areas and sectors i.e., those in which developing countries have comparative advantages. "We need to break from the traditional pattern of developed countries seeking special carve-outs and protection in these areas on grounds of their so-called sensitivity, e.g., agriculture, textiles, Mode 4 and outsourcing of services". 2) Trade rules should give better access to labour-intensive exports of goods and services of developing countries and more scope to the mobility of developing country labour in international trade. 3) In order that trade can contribute to the enormous challenge of poverty reduction, poverty-sensitive export sectors of developing countries should be promoted and supported, including through enhanced and predictable access in premium markets. 4) Developing countries must get better and higher returns from their exports of commodities, manufactures and services, including through trade and investment synergies that facilitate increased value addition. And in this context, UNCTAD’s thrust towards increasing developing countries participation in dynamic new sectors should be encouraged. 5) There must be an end to the untenable situation whereby developed countries demand that market forces should freely determine trade flows while at the same time resorting to trade distorting interventions, such as through massive subsidies in agriculture, industry and services which developing countries are unable to afford, let alone match. 6) The trading system and associated trade rules must reflect that global enterprises have a particular responsibility towards investment in broader economic and social development and in the nurturing of developing country markets for the present and the future. 7) Trade barriers like tariffs which are currently being reduced should not be replaced by other, more sophisticated market entry barriers like SPS (Sanitary and Phyto-Sanitary), TBT (Technical Barriers to Trade), environmental and other standards as well as complex rules of origin. And 8) Trade negotiations and the trading system must not only assure balanced and adequate development gains, but also help to minimise the adjustment pains of the globalisation process.
The statement underlined that Textiles, Agriculture and Services were the key areas where India expects benefits and development gains from the multilateral trading system and trade negotiations.
On textiles, the statement said "It is an employment generating, poverty and gender sensitive and SME intensive sector in India, providing employment and sustenance to 35 million people directly and 58 million indirectly, cutting across the rural and urban divide. We believe that India could share in what UNCTAD has projected as an increase of 27 million jobs and $ 40 billion in export revenues from liberalisation of textiles trade" when the Multi-fibre Arrangement (MFA) quota restraints placed on developing country exports of textiles and clothing end with effect from 1/1/2005. While noting that in the post-MFA phase, the disappearance of quotas should create more favourable conditions for competitive exports from developing countries, the statement expressed the hope that this would not encourage alternative methods of protection like anti-dumping actions or arbitrary labour and environment standards.
On services, UNCTAD’s recent studies have shown that genuine liberalisation of Mode 4 will yield the maximum development gains from multilateral trade negotiations and that gains from new sectors like IT enabled outsourcing of services are also poised to benefit many developing countries including India. In the case of Mode 4, developed countries have made minimum binding market access commitments in the GATS in Mode 4 and their scope is further reduced due to a number of entry conditions, administrative and procedural requirements. Multilateral commitments for liberalised, commercially meaningful and effective market access in Mode 4 would signal the sincerity of the international community to deliver development gains to developing countries, the statement said, adding that India along with some other countries had already identified the barriers which needed to be addressed and the most important of the suggestions related to removal of the economic needs test, and transparency of visa regimes, including a GATS visa. The statement said that India expected UNCTAD to continue its work in analysing and consensus building on key trade issues relating to development gains from the trading system – WTO and the RTAs and from trade negotiations.