However,
he wondered that in spite of being touted as a largest democracy,
why Indian Government had been shying away to engage and discuss
these issues with society at large. He said that even Members
of Parliament were not taken into confidence before signing
the agreements and it was only after the agreements had been
entered into that Parliamentarians were given a chance to
react. He gave an example of European Union where before proceeding
for negotiations, the officials were required to get the clearance
from the Parliament. According to him, the negotiations in
India were chiefly led by officials having little understanding
and appreciation of the socio-political situation of the people
of the country. It was unfortunate that it was not the peoples'
representatives- the MPs but the officials who decided the
course for future generations. Though, he expressed his faith
in the capability of Minister of Commerce, he doubted whether
he knew all the issues involved. According to him it was very
important to build sustainable national consensus on issues
which affected lives of millions of people.
Reacting
on Doha round he said that its objectives were all right but
so had been of WTO to what result?. Citing the case of distorted
international trade in agriculture, Mr. Faleiro said that
developed countries were subsidizing their farmers One Billion
Dollar a day because of which millions of farmers in the poor
countries were condemned to live below the subsistence level.
If such practices were to continue under WTO, how many people
would be convinced that WTO stood for 'free and fair trade'?
Though the importance to move with global community could
not be denied, why must we always end up taking things that
were to our disadvantage, he asked.
He
informed the audience that he along with six Members of Parliament
wrote to Union Minister of Small Industries - Dr. C.,P. Thakur,
and demanded immediate redressal of pressing issues of SMEs
viz.
- Rationalizing inverted import tariff structure
- Strengthening Delayed Payments Act
- Providing liberal Marketing Assistance
- Increase in Investment limit to pave way for Technology
up-gradation
- Insolvency and Bankruptcy code for SMEs
- Implementation of Value Added Tax
(See
copy of letter written by six Members of Parliament)
Presentation
by Mr. Anil Bhardwaj Secretary General, FISME
Mr. Anil Bhardwaj presented an overview
of the WTO and its functions along with brief summary of the
all the Ministerial Conferences of WTO held so far. He explained
in detail the mandate of Doha Ministerial Declaration which
led to launch of new Trade Round. He also briefed about the
current state of play at WTO and proposals of Chairman of
Negotiating Group on Market Access for Non-Agricultural Products
(NGMA) and the contentious issues therein.
According
to him the Doha mandate covers :
- Trade Negotiation in Non-Agricultural products, Agricultural
products and Services
- Review of S&DT and implementation issues
- Clarification on WTO Rules (Anti-dumping, RTA issues)
- Singapore Issues ( Investment, Competition Policy,
Transparency in Public Procurement and Trade Facilitation)
- TRIPS and Public health issues
- New Work programme ( Trade Debt & Finance, Transfer
of technology etc)
(See
presentation: Cancun Ministerial : Issues for SMEs (PPT)
Presentation by Mr. Arun Goyal
Mr.
Arun Goyal spoke on 'what is at stake in Cancun'. According
to him, the Cancun Ministerial was happening at a very crucial
time: the negotiations in Non-Agricultural products, Agricultural
products and Services are at a crucial juncture as the modalities
of the negotiations are expected to be freezed in the conference.
This would to a great degree seal the fate of the new round.
Secondly, it would be the last Ministerial Conference before
2005: the year when the provisions of the two most important
agreements on Patents and textiles and Clothings would become
effective. Thirdly, a definite decision could come on Singapore
issues having far reaching implications for the developing
countries.
He
was critical of Indian negotiators stance in the multilateral
negotiations and said that they usually took rigid positions
to most of issues and when rest of the countries would negotiate
along the way, India left alone in the end would quietly agree
to what everybody agreed. He gave the example of Information
Technology Agreement which India was against initially but
finally we agreed to waive off import duties from the IT products.
The sudden turn of event took the Indian industry by surprise
and it had to pay a heavy price for the fiasco.
According
to him it was rather perplexing that whatever liberalization
we had undertaken as a country, it had been led by multilateral
institutions such as WTO such as removal of QRs, lowering
of import duties, zero duty on IT products etc. Such forced
liberalization created more problems for the domestic industry
as it always came as a surprise and contrary to Government's
stated position. Whereas if right from the beginning a flexible
approach was kept and stake holders were involved in strategy
making, both the Government and the Industry would have benefited.
He was of the view that Governments rigid position on several
issues in Doha agenda might create another fiasco for the
Government in Cancun and the industry should be ready for
some surprises.
Session -II
Address
of Mr. V.K. Agarwal, Sr. Vice President, FISME
Mr. V.K. Agarwal presented FISME's
views on negotiations for Market Access for Non-Agricultural
products and other relevant issues. He said that to overcome
the challenge of the Regional Trade Blocs, it was necessary
that import were reduced under multilateral agreement. He
said that greatest challenge had been the Non-Tariff Barriers
and peak tariffs and the negotiators should focus on their
elimination.
Commenting upon the NGMA proposal for reduction
in duties, he said that the revised formula looks workable
but he stressed the need for closer cooperation with negotiating
team and the SME associations.
Reacting to the recent NGMA proposal of
'zero for zero' for seven sectors, he explained FISME's views
and said that principally FISME agreed that except the electronic
and electrical sector, India was competitive in the six sectors
to penetrate the export markets. However, keeping in view
of the inverted tariff structure, the domestic manufacturers
would be hit particularly in electronic and electrical sector
and auto component sectors. Therefore, if Government was to
agree to the proposal, it should also eliminate import duties
from the raw material of these seven sectors, implement VAT
and strengthen Competition commission.
(See
FISME's Views)
Address of
Mr. S.K. Tuteja, Secretary SSI, Govt. of India
Mr.
Tuteja dispelled the fears among the Small Industries that
something contrary to their interest would come out of Cancun.
He informed that Ministry of SSI was being consulted regularly
by the Ministry of Commerce and the Indian negotiators were
well aware of the concerns of the SSIs. He told the audience
that he represented Ministry SSI as DC- SSI during the Doha
Ministerial and at the Cancun, the present Development Commissioner
would be there. He elaborated on the steps the Ministry undertook
in sensitizing the SSI associations and the SSIs on WTO issues.
He
also informed that sectoral associations were regularly being
consulted on the Sectoral duty elimination proposal and it
would be on their feedback that a final view would be taken.
He
was confident of the ability of Indian entrepreneurs to face
challenges of foreign competition. After removal of QRs also
there were fears about the future of SSIs on the wake of threat
of massive imports from China, however, all such threats were
proved wrong, he said.
One
being asked about his views on Singapore issues particularly
on investment, he said that Government of India's stand on
this issues was clear and that India was not in favour of
an agreement on investment. He asked Mrs. Manisha Shridahar,
Joint Development Commissioner, who was present in the seminar
to explain the issues in detail.
Presentation
of Mr. Rajesh Mehta, Sr. Fellow, RIS
Through, a well researched presentation,
Mr. Mehta explained that there were 2016 SSI commodities (
at 8 digit HS ) out of which India had bound 1336 commodities
in Urugway Round. Majority of these commodities, 922 to be
precise, were bound at 40%. The effective rate of import duty
on 1549 commodities was approx. 35%.
He
presented a table to create different scenarios for different
values of coefficient B used in the proposed NGMA formula.
According to which with base rate of 40% bound duty, the reduced
rate of duty after the agreement could be 21% if the value
of coefficient was taken '1' and 14.3% if value if the coefficient
is 0.5.
According
to him, in zero-for-zero approach, the total number of items
in the seven sector proposed for duty elimination is 654.
The value export of SSIs in these items is three times higher
their import value ( for 1999-2000). Statistically at least,
it looked that the sectors could gain substantially if the
zero-for-zero proposal was accepted.
Elaborating
on possibility of protecting some sensitive SSI product categories,
he explained that the proposed draft provisioned for 5% items
to be kept unbound. India could keep 450 commodities. Therefore,
for very sensitive SSI items which were likely to be affected,
the S&D clause could be utilized.
Also see :
1. Background
Paper: MILLENNIUM ROUND OF WTO NEGOTIATIONS
2.
Presentation : MILLENNIUM
ROUND OF WTO NEGOTIATIONS IMPACT ON INDIAN SMALL SCALE INDUSTRY
(PPT)
Presentation
of Mrs. Manish Shridhar, Jt. Dev. Commissioner, DC-SSI Office
Mrs.
Shridhar responded to a range of questions concerning SSIs
and WTO. At the very outset, she explained that on duty reduction
proposal of NGMA, Ministry of SSI had apprised the negotiating
team of their preference on the value of coefficient not less
than 1. ( That means preference for rate of bound duty to
be in range of 20% for most of SSI products)
On
Singapore issues, she informed that the issues of Competition
Policy or Investment or Govt. procurement were not even being
considered at that time. She, however, spoke on negotiations
in Services Sector and explained that from the stand point
of small service enterprises, service delivery Mode-2 and
Mode 3 needed to be equally stressed for liberalization. India
had been chiefly stressing the Mode-4. She cited example of
auto repair and re-conditioning of machines which could be
very competitive activity in India and presented good opportunity.
She
also raised the issue of Non-Tariff Barriers and the need
of their elimination. She was somewhat disappointed from the
industry associations as the required feedback did not always
reach to the Ministry because of which the data needed could
not be collected. She asked the assistance of associations
as well as institutions such as RIS in this endeavour.
Presentation
of Mr. Pradeep Mehta, Secretary General, CUTS
Mr.
Mehta explained the Singapore issues in details. He questioned
wisdom of having the rigid stand of Government of India on
negotiating on the four Singapore issues. He said that realizing
the need for ensuring fair competition, India opted for Competition
Policy Act for the country. The need for such an agreement
multilaterally was much greater as international cartels were
much more powerful and needed to be contained. In his views,
easing regulations on investment could also be beneficial
for India and there was nothing to fear about an agreement
on investment.
