India protests against WTO plan.

NEW DELHI: India has lodged a strong protest against some of the proposals in the World Trade Organization's (WTO) planned agreement on trade facilitation as it will force the government to undertake major changes, including the way the Budget is presented.

Although commerce and industry minister Anand Sharma said India is in favour of an understanding on trade facilitation, sources told TOI that there are four-five major areas of concern and some of the issues were flagged during the minister's meeting with WTO director general Roberto Azevedo.

While there is little progress on customs cooperation, a key demand from India aimed at enhancing coordination and transparency, the developed countries are expanding the ambit of the proposed pact.

For instance, negotiators have suggested that all customs related changes need to be notified at the draft stage. As a result, Indian officials said, changes in customs duty done in the Budget will have to be taken up like direct tax proposals instead of the current system where the new import duty becomes applicable from midnight. "This is something that can't be done under our system," an official said.

Similarly, while the government has more or less made up its mind on faster clearance for couriers, the developed countries led by the US have now suggested that all air cargo also needs to be cleared within a specified time period, say, two or three hours. Although faster clearance for consignments is to be done over a period of time, officials said it will put undue financial strain on the government, without benefiting Indian exporters. "We will end up spending money to speed up imports. Besides, all air cargo, which could include pharmaceuticals,

even some machinery and equipment will have to be cleared within an agreed timeframe or face action," an official explained.

The government is using trade facilitation as a bargaining chip to get a better deal for subsidy that it pays to Indian farmers through procurement and maintaining food stocks. The WTO membership is, however, agreeing on a "peace clause" that will stop any country from seeking penal action against a developing country such as India that breaches the prescribed cap, which is 10% of the value of production.

While Sharma pushed for a lasting solution at the Bali ministerial conference (MC), he indicated that the peace clause was something that he was willing to accept till a full-fledged solution was found.

"We are working towards a positive outcome at MC-9... there is appreciation of the legitimacy of food security and associated concerns in India and other developing countries and poor countries. Now we have to work towards the acceptable formulations... Surely their (negotiators') intention is to eventually find a lasting solution and that's what will be our sincere and best endeavour."

Source : timesofindia.indiatimes.com