India in the WTO

Greg Rushford of the rushford report has criticised India for “threatening” the Doha talks in an article in the Wall Street Journal today. He calls India the “Elephant in the Room” that “can least afford the collapse of the Doha Round”.

Last week, the Indians were back to the rhetoric that has marked their negotiating style throughout the Doha process. The latest spat was over a newly circulated draft negotiating text on “rules,” including possible reforms of protectionist antidumping laws. The measure is controversial, and even the Americans have voiced concerns on some issues. But whereas U.S. officials expressed willingness to negotiate, their Indian counterparts threatened to close the door. Ambassador Ujal Singh Bhatia, India’s top trade diplomat in Geneva, called the draft text effectively an insult. India has been committed to the Doha negotiations, the ambassador said, “but if, God forbid, a time comes when that price of engagement is unpayable by us, then we will have to stand up and say that.”

That’s a rich statement, given India’s negotiating tactics. Rather than express willingness to negotiate gradual, phased-in liberalizations — which is how the Doha process is supposed to work — Trade Minister Kamal Nath has a long list of sectors he has insisted are “non-negotiable” from the get-go, including a “negative list” of politically “sensitive” imports that are discouraged, if not actually prohibited, from fruits and vegetables to grains, edible oils, rubber, cotton and silk.

He suggests:

While the rich Europeans and Americans actually could afford to walk away from the Doha Round, India would pay a dear price for its failure. Consider the gains India has already reaped from earlier rounds of partial trade liberalization.

Is this really a fair assessment? Rushford argues that India needs more tariff and regulatory reforms and better infrastructure to continue to grow, and that without the Doha round, India will have no “pressure to fix those problems”. What he omits to mention is why the United States and Europe need a successful Doha round … Under present WTO rules, agricultural support in both the US and the EC will be open to legal challenge at the World Trade Organization’s dispute settlement body. Thus both the US and the EC want a Doha round outcome that will renegotiate these rules and allow them to continue their agricultural subsidies, albeit at a reduced level. And there are other reasons. All WTO members have a stake in a successful Doha outcome.

And as far as reform goes, India has engaged in unilateral reform before and will continue down that road. The dynamic within India has changed and now the reform agenda finds its strongest supporter within India itself, among Indian business. And bilateral and regional engagements will contribute to that impetus for reform. Almost everyone seems to want an FTA with India these days.

All this is not to say that a balanced Doha round will not bring benefits to India. It will and Indian negotiators and business certainly realise that. But it seems unfair to criticise India for “negotiating”. Its important to understand that domestic trade politics in India has evolved from its non-existent status in the Uruguay Round to a highly informed and contested democratic politics today. And no one would know better than the United States, that domestic trade politics is both important to negotiate a beneficial trade agreement and cannot be ignored. Domestic trade politics is essential for good trade policy making by the government.

Nonetheless, Mr Rushford makes a very valid point when he highlights how India loses out in international business:

The World Bank’s latest Doing Business survey estimates that the cost, including tariffs, poor roads, others customs duties and bureaucratic red tape, for India to export a carton of goods to the U.S. is $820; for China, it’s $390. It costs India $910 to import a carton from America, compared to $430 for China. Overall, the survey ranks India 120 out of 178 for ease of doing business. China ranks 83.

However, some of Mr. Rushford’s advice to India might be too simplistic. For instance he suggests:

Since the economic logic is so powerful, one would think that India’s trade negotiators would be eager to bargain away tariff walls that hurt the country’s competitiveness. Wrong. In the Doha talks, India wants to retain “policy space” — a code word for protectionism — to raise tariffs any time it might find it convenient to prop up this or that uncompetitive domestic industry, like Brazil has been doing. Somehow it doesn’t occur to the Indians that their models on tariffs, instead of Brazil, should be the likes of Singapore and Hong Kong, where tariffs are negligible and economic growth is rampant.

Surely, India’s size and development needs would require trade policy that differs from that of Singapore and Hong Kong?

In a guest column in the Economic Times last week, Suparna Karmakar, of ICRIER suggests that the intractabilities in ongoing Doha negotiations mean that the talks might only end in 2010, with implementation starting in January 2011.

The most likely scenario is that Doha will remain at the present level of low-key engagement till 2009, when negotiations will begin in full earnest and a likely timeline for the Round to start implementation will be January 1, 2011.
Why 2011? This is because multilateral trade negotiations are more of an exercise in political economy than pure economics or even trade imperatives. Tradeoffs in WTO negotiations are essentially slug-offs between the well-established and entrenched interests within individual countries and sectors, to the detriment of others (both at home and outside) who would otherwise have benefited from freer trade.
However, even with an agreement on the broad contours of the potential deal by mid-2009, the sorting out of ‘modalities’ and other details which would be necessary before the agreement can be deemed to be ready for signatures, would take anything between 12-15 months.

On what Doha difficulties mean for the future of the WTO, she writes:

Two variations of a view are doing the rounds when it comes to Doha’s prospects. Some opine that WTO is dead; others say Doha is dead. In this author’s view, neither is a plausible scenario; and anyway, multilateral institutions and engagements don’t just die so easily.
The problems in this round are not only because of an overly enhanced agenda and a large membership of developing-countries, who are active participants and demandeurs unlike in the earlier rounds, but also because the negotiations are focused on ‘politically sensitive’ issues that call for difficult adjustments from all participants.

In an interview to the Business Standard, senior vice-president of the PHD Chamber of Commerce and Industry (PHDCCI) said that a common economy for north India would increase the North’s GDP by 2% and add 8-10 billion $ to the economy.

What do the prospects for this happening look like?

It is a difficult process since it involves co-ordination at all levels to ensure free movements of goods, be it regulating mandis and trade, movements of vehicles, quality assurance, processing goods, storage and so on. T K A Nair, principal secretary to the Prime Minister, had called for a standing committee of state secretaries to push this concept. We are hopeful this will be realised in the near future.

… Currently north India contributes nearly 40 per cent of the country’s GDP. We are trying to move towards an integrated market, and want a step-by-step removal of inter-state barriers to trade, apart from promoting e- governance, encouraging hydroelectric projects and so on. All these issues were raised at the chief secretaries’ summit we had this year. Through fora like this we plan to take these issues forward.

While the PHDCCI with a membership base in 10 states in North India is limiting its mandate to a common market in North India, the idea of a common market for India as a whole has also been discussed in other fora.

ICRIER’s working paper no. 83 titled Domestic Market Integration studied the extent of market integration in India and had come up with the following policy suggestions:

• restriction of the Essential Commodities Act, 1955 for emergency use.
• A new central statute to prohibit controls on movement between states
• abolish octroi and other indirect taxes and levies on food articles across India
• agricultural policy reforms to remove restrictions on movement, tax structure reforms on agri commodities, enlarging coverage under the agri commodities futures market,
• reducing commodity coverage in food subsidy programs
• enhance role of private sector in food procurement
• improve transportation infrastructure
• remove tariff policy distortions that subsidise passenger traffic by overcharging freight
• allow FDI in retail
• tariff rationalization in the power sector, provision of universal access to commercial fuel at affordable prices
• policies aimed at establishing competitive real estate prices for retail sector

The OECD’s Economic Survey of India 2007 also discusses the reforms needed to create a common market for India.

Though difficult to execute within India’s decentralized constitutional and political structure, with Indian federalism witnessing a devolution of power to the states, a common market for India is an idea whose time seems to have arrived. 

Since the World Trade Organization came into existence, India has embarked upon institutional reform as well as policy reform. As part of its response to the WTO, India set up a Tariff Commission in 1997.

According to its website, the Tariff Commission functions as an independent expert body to recommend appropriate tariff levels keeping in mind the larger economic interests of  our country. The Commission also conducts studies on costing and price fixation referred to it by Central and State Ministries and Agencies.

The functions of the Commission include providing advice to governments/state agencies upon request on the following subjects:

• to recommend on matters regarding fixation of tariffs and tariff related issues for goods and services
• To evolve an overall tariff structure and look into the issue of tariff rationalisation
• To study critically market access offers received from trading partners as part of the WTO framework and advise government on opportunities and challenges generated by these offers
• To examine the transition period required for selected industries and recommend the gradual phasing-out of tariffs
• To identify the tariffication process for select economic activities
• Classification of goods, and products along with applicable tariff on such good.

In addition, the Commission can independently undertake the following activities:

• To conduct detailed impact analysis of select sectors (textiles,, agriculture, automobiles, information technology , chemicals, steel and engineering goods) through multi-disciplinary teams ;
• To maintain and monitor inventory of tariff rates at sufficiently detailed level and tariff changes in competing and trade-partner countries  
• To carry out technical studies on the cost of production of goods and services and competitiveness in relation to other countries. 

At present, the Tariff Commission is engaged in the following studies:

• Impact of taxes and duties on competitiveness of the Indian Auto Component Industry as compared to Auto Component industry in China and other South East Asian Countries – referred by Department of Heavy Industry
• Export competitiveness of wagon manufacturing units in India – referred by Ministry of Heavy Industries and Public Enterprises
• Benchmarking of Machine Tools Sector, particularly comparison of M/s HMT Machine Tools Ltdwith leading players in the private sector – referred by Ministry of Heavy Industries and Public Enterprises
• Impact of Free Trade Agreement on Domestic Pharma Industry – referred by Ministry of Chemicals and Petrochemicals
• Study on critical analysis of the Impact of Port Tariff Regulation and the effect of such Regulation on EXIM Trade – Department of Shipping, referred by Ministry of Shipping, Road Transport and Highways
• Assistance that can be given to Indian companies to bid for and win infrastructure and economic/social development projects, contracts being multilaterally funded in Africa – referred by Ministry of External Affairs  
• Preparation of data base of items being frequently imported/exported by the Biotech Companies – referred by Department of Bio-Technology  
• Economics of transportation of POL by various modes for suggesting appropriate and optimal model mix – referred by Ministry of Railways  
• Pricing of Levy Sugar – referred by Department of Food and Consumer Affairs  
• Cost-pricing of complex fertilizers, DAP & MoP – referred by Department of Fertilisers  
• Cost-pricing of B-Twill Jute Bags – referred by Ministry of Textiles  
• The competitiveness of Indian Telecom Manufacturing Sector and demand for telecom equipments, handsets, parts and components – referred by Department of Telecommunication

Studies completed by Tariff Commission in 2007:

• Impact of Indo-Singapore Comprehensive Economic Cooperation Agreement (CECA Assessment)
• Quick study of impact of change in royalty rates on coal & lignite on cement prices

Studies completed by Tariff Commission in 2006:

• India’s need for Critical Raw materials & identification of various sources of such raw materials in Asia, Africa and Latin America
• Study on Rules of Origin
• Transportation Tariff Charged by M/s GAIL for Supply of KG-Basin Gas to Power Producers through its pipeline network
• Mechanism for Coal Pricing
• Determination of producer price of natural gas produced by ONGC and OIL
• Revision of Rates in respect of various types of Condoms

According to the website of the Tariff Commission, its services are accessible to “to all citizens and agencies. Groups and associations, companies and organizations, NGOs etc. They can approach the Commission with issues relating to its terms of reference. Studies are selected on the basis of general public relevance of the issue, the nature of the problem and the Commission’s own action plan.”

In my next post on the Tariff Commission, I will comment upon its structure and functioning from the perspective of domestic insititutional reform for better trade policy making.

The challenge by the United States against certain import duties imposed by India on imports from the United States is pending a decision by a panel constituted under the Dispute Settlement Understanding of the WTO.

A panel was constituted on 20 June 2007, after a complaint by the US in March. The Panel has completed hearing the parties during two meetings with the parties on 17 September and on 23 November. The three member panel is comprised of Mr Luzius Wasescha (chairman) and Mr Mateo Diego-Fernández and Mr Bruce McRae (members).

The WTO Dispute settlement understanding stipulates that the panel proceedings and parties submissions are confidential, however it is open to parties to make their own submissions available to the public. The submissions and statements made by the United States in these proceedings are available here.

While the US has argued that certain additional import duties in India result in customs duties that exceed India’s WTO  bound rates, India has argued that these additional duties merely offset internal taxes applied to “like” domestic products, which is permitted under GATT article II:2(a). GATT article II: 2(a) prescribes that any such imposition must comply with the national treatment requirements under article III, GATT.

Specifically, the US is asking that the panel rule that Indian additional duties for alcoholic beverages violate WTO bound tariff levels and that the extra additional duties on alcoholic beverages and certain agricultural and industraI imports are also WTO inconsistent. According to India, while the additional duties offset state level excise charges, the extra additional duties offset state level VAT and CST charges.

Another issue that the panel must resolve is whether certain notifications issued by the government of India after the terms of reference were framed for the panel can be considered by the panel as part of India’s defence. These include customs-notification 82-2007 dated 3 July 2007 which exempts alcoholic beverages from the impugned additional duties, and customs notification 102/2007 dated 14 September 2007 which establishes a credit-mechanism to address the American complaint of double-taxation in respect of VAT charges for imported products. Even though these subsequent notifications by India might modify or withdraw the measure challenged, the US is arguing that the panel must make a finding of WTO consistency of the original measures challenged and that these new notifications can only be considered at the compliance stage.

The European Communities had raised a similar dispute with India in respect of alcoholic beverages, but had agreed for a suspension of the panel in its case (DS 352)after India issued customs-notification 82-2007 dated 3 July 2007. However, the EC has participated as a third party in the US complaint and has filed a third party submission supporting the case of the United States.

In an interview to the Indian Express, Indian minister of commerce Kamal Nath answered questions on issues ranging from FDI to agri reforms to climate change and child labour.

On India’s liberal FDI policies

To put this in perspective, India’s FDI regime is one of the most liberal, if you look at the FDI policies in other Asian countries, even Europe and the U.S. It’s not about what you are allowing; it’s about the conditions set in allowing it. You can’t go into civil aviation in the U.S. — even a few percentage points! In New York, I was asked a question on FDI and I countered: When will you allow FDI in civil aviation? We have one of the most liberal FDI regimes in the world. What we don’t have is FDI in a few sectors like retail and defence. But in telecom we allow up to 74 per cent, which few countries would allow. The U.S. would not allow that. The same people who are preaching to us do not have as liberal FDI norms as we do.

On FDI reforms

In Asian countries, the conditions are — get this and that approval, security clearance from various agencies. If it’s allowed, it’s allowed: there must be no element of frustration. From $ 1 billion to $ 2 billion four years ago, last year we got $ 15.7 billion. But there are clauses in FDI policy that say an investor is allowed to put in 74 per cent, but in five years he must disinvest to 51 per cent! These are retrograde policies. Investors say, ‘What the hell, we don’t want to invest!’ To answer your question, the cabinet is going to correct these anomalies, to open up some sectors that were not allowed, such as titanium, because they were strategic minerals. There’s a huge proposal for a titanium project (the Boeing project).

On FDI in retail, in particular multi-brand retail 

There are issues about FDI in retail, and the question is about big versus small. What is the amount that will not rock the boat for the small retailer? For in India retail is complex and is also the largest employer.

… You have electronics, sports goods, pharmacy, food, stationery. The question is, should we just look at retail or segmentise it? We are looking at Commonwealth Games. Can you tell me a single sports goods shop where you can get all sports goods? Retail in electronics is not the retail that will upset the neighbourhood kirana store. There’s a difference: it has just got stamped that FDI in retail will upset all kirana stores.

On the need for agriculture reforms

Look at the macro situation. There are 650 million people in agriculture, but this agriculture is not commerce but subsistence agriculture: 70-80 per cent of it is on one to one and half hectares, which does not work for tractors or pumps. And what are they growing? Not broccoli, a high-end product, but soyabean. What soyabean will you grow on 1.5 hectare! This is not sustainable. We had one agricultural revolution that turned India’s course and made it self-sufficient in food. We then had the IT revolution. We need a second agricultural revolution to turn agriculture from subsistence to commerce.

… Our emphasis has been on pre-harvest investment. Post-harvest investment in agriculture has been very poor. We are the second-largest producer of fruits and vegetables. But only 2-3 per cent is processed, 37 per cent rots. We got to have more investment in post-harvest agriculture. There’s also the problem of small land holdings. Most schemes for marginal farmers, (created) without looking at the economics of it, have not helped.

On climate change responsibilities

When I was environment minister and we signed the climate change treaty, U.S. was not a part of it. Principle number one: Polluter pays. Then consumption patterns: we are not saying everyone must have one less beer, we are asking them to check wasteful expenditure. Principle number two: common, but differentiated responsibility. We have responsibilities, at the end of the day, you occupy more space, you pay more rent. The question is how much. The U.S. has not even agreed to the Kyoto protocol.

On child labour, Nath’s comments go towards the need for a debate on defining child labour.

Where’s child labour permitted by Indian law? We have firm laws. They go somewhere and take pictures and say this is being made for GAP! And the Dutch thing! Their NGOs, along with some Indian NGO partner, printed a story with false computer pictures. The Dutch buyer said this is bogus. The Dutch NGOs put it up on the Internet and starts slandering. The Indian company went to court and the court issued summons that these are false. When the Dutch minister came, I said we’ll take retaliatory action. Now, they are trying to make peace.

…We have to look at the holistic sense. The chap who is doing handloom work sitting at his place, is he a child labourer? You have to look at the context. So much of our heritage, so much of our skills, are passed down from one generation to the other. The tennis player’s eight-year-old son is being forced to play tennis. Is that child labour?

… Child labour is what happens in factories and construction. Go to Kashmir. Children are doing some of the most intricate work. Handloom work in my own district is done by children sitting at home.

On Special Economic Zones (SEZs) see http://sezindia.nic.in/

You cannot mistake the new investment and employment in SEZs. Around 22,000 crore has been invested in SEZs, they are generating so many jobs. What is an SEZ? An industrial cluster for exports, with hospital, training and community centres etc. Where’s real estate in that? All (talk of real estate issues) is imaginary.

The current global focus on energy, climate change and their linkages with trade and investment policy will require engagement and informed responses from not only the Indian government, but also from Indian businesses in their growth strategies, both in India and overseas. Similarly, investors in India will be looking for opportunities and risks in these policy sectors in India.

As the action intensifies in the World Trade Organization, other multilateral and intergovernmental fora are also key sites where global policy in these areas is being negotiated.

Apart from the Climate Change talks in Bali, which involve trade and finance ministers for the first time, the International Energy Agency is also deepening engagement with both China and India.

India and China are not members of the IEA, whose current membership is limited to 27  industrialized countries. However, the IEA sees itself as entering a new phase in their work with India and China. An IEA press release gives more details:

06 December 2007 Paris — “As China and India become major players in global energy markets, it makes sense to share views with them on our common energy challenges”, said Nobuo Tanaka, Executive Director of the International Energy Agency (IEA) today in Paris. “For the first time ever, the 27 member countries of the IEA have invited high-level Chinese and Indian delegations to participate in “Committee Week” – several days focusing on key energy issues including emergency response preparedness, the outlook for oil, gas and coal markets, energy technology collaboration and energy efficiency measures. “We hope that this interaction will identify further opportunities for co-operation”, added Mr. Tanaka.
The week’s unprecedented activities included the convening of key IEA committees on emergency preparedness, oil markets, long-term policy co-ordination, energy research and technology, as well as the IEA Governing Board. A strong delegation from the National Development and Reform Commission (NDRC) and national oil companies represented China at the IEA. The Indian delegation included senior officials from the Ministry of Power, the Bureau of Energy Efficiency and the NTPC (formerly known as National Thermal Power Corporation). Representatives from all IEA member countries also participated.
“The presence of delegates from China and India around the table in our discussions this week underscores our mutual commitment to continue to work together and to find ways to ensure clean, reliable affordable energy for the future. This is a global challenge that we must face and overcome together”, said Mr. Tanaka.
The IEA has long recognised the accelerating globalisation of energy markets and the growing importance of rapidly developing economies in the shaping of global markets, energy security and environmental sustainability. This week has marked a step change in the IEA relationship with China and India, encouraging their greater direct involvement in the work of its main policy Committees. Much co-operation has occurred with China and India in improving energy data collection, energy efficiency, energy market reform policies, technology and the development of emergency preparedness and response systems. But the magnitude of the challenges calls for greater effort.
The IEA and China will reinforce their work on emergency planning and crisis management during an IEA Emergency Response Exercise (ERE) which will take place next June in Paris. It is designed to prepare IEA member countries for any oil supply disruption, but its lessons are transferable to countries developing their own emergency response capability – especially China and India. The IEA hosted senior Chinese statisticians in late 2007, to prepare a plan of co-operation on energy statistics, including energy efficiency indicator work, to lay the foundations for better informed energy policy-making. Recently, Chinese energy researchers met their IEA member counterparts – a meeting that significantly increased direct collaboration in energy research, development, demonstration and deployment in fields such as renewables, clean coal and demand-side management. A similar step is envisaged with Indian researchers in April of next year. To meet the challenge of climate change, China and India are invited to join the IEA in new work on Financing Low-Carbon Technologies in Emerging Economies.
The 2007 edition of the World Energy Outlook (WEO) focuses on China and India, identifying them as the world’s fastest growing energy markets, and underscores the importance of sharing our experiences with them and learning from theirs. “China and India are simply too important to ignore”, observed Mr. Tanaka. “It is my hope that the discussions during the past days will be a significant impetus for enhanced engagement with China and India”.

Alan Bryden, the secretary-general of the International Organization for Standardization was in New Delhi last week, and called upon India for more engagement in making international standards.

His visit highlights that the ISO will now focus on developing industry and stakeholder standards in the climate change, environment and energy trade area, – sectors which are now taking centre-stage in global trade policy making. He explained the role of standards in these new emerging sectors. The Financial Express covered this visit:

The ISO secretary-general, Alan Bryden in an interaction with the industry in Delhi on Thursday said : “We have formulated some norms like environmental management, environmental labeling, life cycle analysis, greenhouse gas emissions accounting and verification, air, water and soil quality, ship recycling, but we need to do more in the area, particularly in relation to climate change and trading in emission credits.”

In collaboration with the International Energy Agency and the World Energy Council, ISO would formulate norms on bio-fuels and bio-diesels, energy management and auditing, energy efficiency in transportation, sustainable and energy efficient buildings, hydrogen technologies and solar energy.

The FE also reports on India’s thus far limited participation in the ISO. The highlights according to the report: 

• India is represented in the ISO through the Bureau of Indian Standards (BIS) from 1947, which is the designated Indian enquiry point under the WTO’s agreement on technical barriers to trade (TBT).
• BIS has formulated 18324 standards for goods and services, out of which only 4500 are aligned to ISO norms.
• India has been elected to sit in the ISO governing council for two years starting January 2008. India was earlier on the ISO governing council in 2002 and 2003. The ISO governing council has 18 members.
• India had hosted the meeting ISO sub-committees on plastics and textiles.
• India is also a participating member of ISO sub-panels like DEVCO, CASCO, COPOLCO.
• Indian is the regional coordinator for standard formulation in South Asia, which is recognised by the ISO as a separate entity in standard formulation.
• ISO members are ranked according to their contribution in quality setting as well as country GDP. India is ranked 18 and is in the second group of countries alongwith China, Brazil, Spain and Holland.

As posted earlier, Thailand and Australia had recently complained (Nov 2007) about India’s allegedly WTO-inconsistent subsidies for sugar exports. And now its Brazil complaining.

Reuters reports that the Brazilian sugar industry is studying Indian subsidies in order to convince their government to take up the matter with the Indian govt.

“This is an export subsidy that violates article 9.4 of the Agreement on Agriculture, and we consider it questionable,” Jank told Reuters by telephone, adding that India does not have a WTO commitment that enables the use of export subsidies.

…

India extended domestic freight subsidy in October by one year given to sugar mills which have been hit by a drop in international prices, caused by a world sugar glut.

So until April 2009, India’s government is expected to offer sugar mills a subsidy of $30 to $35 per tonne to boost exports.

Encouraged by high sugar prices through mid-2006, India increased its planted area for cane and is expected to surpass Brazil as the world’s top sugar producer this season.

Its sugar surplus has been forecast to rise to 11 million tonnes this year, up from 4 million tonnes in 2006.

“This assistance doesn’t make sense as they are currently subsidizing international consumers as world prices fall. It’s not good for them, nor for any exporter”, Jank said.

He said India should divert subsidies to ethanol production, contributing not only to reduce the country’s sugar surplus but also to solve its internal energy problem.

“This would be the fastest way. The other way is more complicated, a dispute, which we are obviously examining,” he said.

The suggestion to divert subsidies to ethanol production is interesting. I will be posting on the policy and activity in India on biofuels including ethanol.

India and Brazil have criticised the new EU-US proposal for a new WTO “green trade agreement”. The proposal envisaged as a two tier process would according to the European Commission compise of these two stages:

• First, agreement to liberalise trade in at least 43 goods with clear environmental benefits drawn from a World Bank list including solar panels and wind mill turbines.
• Second, an even more far-reaching Environmental Goods and Services Agreement (EGSA) to be negotiated by WTO Members, which would foresee further binding commitments to eliminate tariffs and non-tariff barriers in trade in green technologies. In services, highly ambitious and comprehensive commitments would be undertaken that address environmental and climate change challenges such as waste management. Developing countries would be asked only to make contributions proportionate to their level of development.

A two page summary of the proposal is available here.

The Guardian reports on Indian and Brazilian reaction to this proposal:

“We don’t think it’s a basis for negotiation on environmental products,” said Brazil’s top trade negotiator, Roberto Azevedo. “Brazil is deeply disappointed with the proposal. We find the proposal modest, we find it biased and we find it protectionist,” he told a briefing.

Azevedo noted that the U.S.-EU proposal made no reference to biofuels, of which Brazil is a major producer, or the technologies to produce them, and said the list was geared to U.S.-EU products. “Anything that they don’t produce is not on the list,” he said.

Bhatia said India could support proposals to free up trade in goods whose sole use was countering climate change, such as solar panels or windmills, but the list could be extended over time to new models of cars or refrigerators that were more energy-efficient, and that was unacceptable.

“Their list is a disguised effort at getting market access through other means and does not satisfy the mandate for environment,” he said.

India and Brazil are also opposing the new negotiating text on “rules” (view it here) that would allow “zeroing” for calculation of anti-dumping duties.

India’s reaction to the fisheries text, is also not very enthusiastic:

Bhatia said the proposals on banning most fisheries subsidies, welcomed by environmental groups, would cause India difficulty as it tries to improve the living conditions of its fishermen, among the poorest people in the country.

The proposals do give some leeway to developing countries to support fishermen, but he said the conditions, such as setting up approved fisheries management schemes, were too onerous.

India had proposed special treatment for small scale, artisanal fisheries on development grounds. Draft article III of the new fisheries text deals with S&DT for developing countries.