A tariff is a tax levied on imports or exports. Tariffs are usually associated with protectionism.
WTO and INDIAN SEA FOOD TRADE
Submitted by : James j pulikottil
HISTORYDuring great depression of 1930’s theinternational trade was badly affected andvarious countries imposed import restrictionsfor safeguarding their economies. It resulted in sharp decline in world trade. 1n 1945, USA put forward many proposals for extending international trade and employment. On October 30th, 1947; 23 countries at Geneva signed an agreement related to tariffs imposed on trade.
Principles adopted by GATT(General Agreement on Tariffs and Trade)• A contracting party’s trade policies must treat all GATT members equally.• No member country shall discriminate between the members of GATT in the conduct of international trade.• Members of GATT agree to apply the principle of ‘most favored nation’ to all import and export duties.• National Treatment : Foreign goods, services, or investment are to be treated “no less favorably” within a nation’s domestic markets than competing products or services produced locally.
ROUNDS OF GATT NEGOTIATION Between 1947 and the last year of GATT there were 8 rounds of negotiations between the participating countries. The first 6 rounds were related to curtailing tariff rates. 7th round included the non tariff obstacles.The 8th round was entirely different from the previous rounds because itincluded a number of new subjects for consideration. This 8th round was known as “URUGUAY ROUND”. The discussions at this round only gave birth to WORLD TRADE ORGANISATION (WTO).
Uruguay Round• The eighth GATT round — known as the Uruguay Round — was launched in September 1986, in Punta del Este,Urugua• It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles. The Final Act concluding the Uruguay Round and officially establishing the WTO regime was signed April 15, 1994, during the ministerial meeting at Marrakesh, Morocco and hence is known as the Marrakesh Agreement• The GATT still exists as the WTOs umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations
• The impact of the Uruguay Round Agreement on the Application of Sanitary and Phytosanitary (SPS) agreement and the agreement on Technical Barriers to Trade (TBT) adopted by WTO Members in 1995 is clearly depicted through the following figure.
WORLD TRADE ORGANISATION(WTO)• The World Trade Organization (WTO) is officially commenced on January 1, 1995 under the Marrakech Agreement replacing the General Agreement on Tariffs and Trade (GATT),• The topmost decision-making body of the WTO is the Ministerial Conference , which usually meets every two years. It brings together all members of the WTO• The inaugural ministerial conference was held in Singapore in 1996
Functions of WTOWTO is based in Geneva, Switzerland. Its functions are: Administering the multilateral trade agreements which together make up the WTO Acting as a forum for multilateral trade negotiations Seeking to resolve trade disputes WTO is not a “Free trade” institution. It permits tariffs and other forms of protection but only in limited circumstances.
Principles of WTO• Non discrimination• Free Trade: Promote free trade between nations through negotiations.• Stability in the trading system: Member countries are committed not to raise tariff and non tariffs barriers arbitrarily.• Promotion of Fair Competition: WTO provides for transparent, fair and undistorted competition.• It discourages unfair competitive practices such as export subsidies and dumping.
Doha Development Round• The fourth ministerial conference was held in Doha in the Persian Gulf nation of Qatar. The Doha Development Round was launched at the conference. The conference also approved the joining of China, which became the 143rd member to join• This was to be an ambitious effort to make globalization more inclusive and help the worlds poor, particularly by slashing barriers and subsidies in farming. The initial agenda comprised both further trade liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing countries
The Doha and the HK round proceedings include a number of issues of particular importance to international trade in fish and fishery products, i.e. fisheries subsidies, market access, environmental labelling, the relationship between WTO trade rules and environmental agreements.• The main areas up for negotiation were tariff and non-tariff barrier reductions
Advantages of WTO• The WTO members now account for over 97% of the international trade indicating the potential of bringing about an orderly development of international trade.Benefits of WTO:• GATT / WTO has made significant achievements in reducing tariff and non tariff barriers to trade. Developing countries too have been benefiting significantly.• Liberalization of investments has been fostering economic growth of a number of countries.• It has a system in place to settle trade disputes between nations.• It has a mechanism to deal with violation of trade agreements.
Drawbacks:• Negotiations and decision making in the WTO are dominated by the developed countries.• Many developing countries do not have the financial and knowledge resources to effectively participate in WTO discussions and negotiations.• Due to the dependence of developing countries on the developed ones, the developed countries are able to resort to arms twisting tactics.
• Tariff measures : A tariff is a tax. It adds to the cost of imported goods and is one of several trade policies that a country can enact.• Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff. Some common examples of NTBs are anti- dumping measures and countervailing duties..• Specific Tariffs : A fixed fee levied on one unit of an imported good is referred to as a specific tariff.• Ad Valorem Tariffs : Ad Valorem Tariffs this type of tariff is levied on a good based on a percentage of that goods value.
• sanitary and phytosanitary measures (SPS): SPS measures refer to any measure, procedure, requirement, or regulation, taken by governments to protect human, animal, or plant life or health from the risks arising from the spread of pests, diseases, disease causing organisms, or from additives, toxins, or contaminants found in food, beverages, or feedstuffs• Import Quotas : An import quota is a restriction placed on the amount of a particular good that can be imported.• free trade area : Trade within the group is duty free but members set their own tariffs on imports from non-members (e.g. NAFTA) TRIPS (Trade Related Intellectual Property Rights Agreement The agreement requires member countries to provide patent protection to all products or processes in all fields. The protection is granted subject to the following three conditions: – The product or process is a new one. – It contains an inventive step. – It is capable of industrial application for 20 years from the grant of the patent
WTO AND INDIAN SEA FOOD TRADE• Indian fisherman and fishery exporters face complex negotiations at the WTO-GATS level on tariffs and fishery subsidies, and bilateral and regional negotiations with the EU in the formulation of Economic Partnership Agreements (EPAs) and Fisheries Partnership Agreements (FPAs). In addition, they need to comply with increased food safety standards. The impact of GATS and the implications on Indian marine trade & services are assessed mainly in context of Tariff Measures, Non-tariff measures
New policies for the indian sea food tradeIn June 1991, the newly elected government recognized that India’s budget deficit, balance of payments problems and structural imbalances would require re-evaluation of past economic policies and financial institutions. As part of its economic reform since that time, the Indian government has taken consistent steps towards a more open and transparent trade regime.• The average bound tariff for fish products is 68.6%. There are also taxes of 4% and 10% to be added to most products.• Despite reforms, Indian tariffs are still among the highest in the world, especially for goods that are also produced domestically. In the Uruguay Round, India undertook a two-tiered commitment on industrial products, binding at 40% tariffs on items in excess of 40% percent, and binding at 25% items with tariffs below 40%.• India has an import licensing system. Even though the system was liberalized, there are a number of goods that are subject to strict licensing rules, among them seafood products.
• The opening of India’s tax regime has reduced tariff levels, but it has not eased some of the most burdensome aspects of the customs procedures. Documentation requirements are extensive and delays are frequent• Under the Export-Import (exim) policy of 1992, import of most of the fisheries items was either restricted or prohibited. But in the next exim policy (1997- 2002), the list of freely importable and importable items under Special Import License (SIL) was expanded considerably. In the latest exim policy (2002), almost all commodities were moved to the list of freely importable commodities, except for five groups (Anjani Kumar et al 2002:16) (Table 9). The lifting of QRs is also accompanied by a relaxation in tariffs on fish products, which have come down from 60 percent in 1988-89 to 35 percent in 2002-03.
Anti Dumping Measures:• The WTO Agreement provides clarity in the method of determining that a product is dumped.• REFERENCES•• Implications of the WTO on Indian Marine Industry, Issues and Policy Perspectives Mrs. Manasvi M. Kamat & Mr. Manoj Subhash Kamat• Policy research: implications of liberalisation of fish trade for developing countries , A case study for india Venkatesh salagramaWikipedia the free encyclopedia, http//www.wikipedia.com• A product is regarded as dumped when its export price is less than the normal price in the exporting country or its cost of production plus a reasonable amount of administrative, selling and any other costs.• Anti-dumping duties are to be imposed on goods that are deemed to be dumped and causing injury to producers of competing products in the importing country. These duties are equal to the difference between the goods’ export price and their normal value, if dumping causes injury.• Countervailing measures - Action taken by the importing country, usually in the form of increased duties to offset subsidies given to producers or exporters in the exporting country.