India in the WTO

The Statesman carries a report that an Indian NGO has welcomed statements from EU officials about including animal welfare as a non-trade concern in WTO agreements. The report:

Animal activists in India have welcomed a move by the European Union (EU) to push for inclusion of animal welfare in the World Trade Organisation (WTO) multilateral trade negotiations. They have said that they will pursue the goal of welfare of animals including stray animals that are subjected to untold sufferings.
Hailing the EU move as the right one, Citizens for Animal Rights (CFAR), New Delhi, said that the inclusion of animal welfare standards in WTO agenda is urgently needed to effectively enforce animal standards worldwide, and to improve the appalling condition of slaughter houses in many countries, including India. India should take the lead in promoting animal welfare as the land of Ahimsa, they said.
Animal welfare concerns are being increasingly recognised in food production around the world, but they must be formalised within the WTO trade agreements, according to several senior representatives of the EU who spoke at a recent Brussels conference on "Global Trade and Farm Animal Welfare". Czech agriculture minister Mr Petr Gandalovic, the new chair of the EU Farm Council, explained that the next six months will see a strong focus on European animal welfare standards, including new slaughter rules.
EU health commissioner Miss Androulla Vassiliou also highlighted the growing importance of animal welfare issues as live animals and animal produce are traded across the world, arguing for their inclusion as a "non-trade concern" in WTO agreements. She said: “Animal welfare is gaining rapid momentum, not only in the EU but worldwide”. The importance of animal welfare in ensuring the quality and safety of meat was also highlighted, as well as the goal of minimising animal suffering.

Its interesting to see another example of an Indian NGO engaging with WTO issues.  However, I am not sure (from the above report) as to whether the Indian NGO really understands this issue. They seem to be talking about welfare of animals in all circumstances including stray animals  and their concerns are more appropriately addressed by domestic regulation on domestic treatment of animals. The EU officials on the other hand want to make this a WTO issue and bring in a WTO rule that allows countries to prevent imports on the ground of animal welfare. The issue is whether such a new emphasis on animal welfare is needed in the WTO treaties. Isn’t GATT article XX sufficient to allow for measures on the ground of animal welfare, in as much as it would be necessary to protect public morals or to protect animal life or health? The SPS agreement also allows for measures for the protection of animal life or health. Such measures can include regulation of processes and production methods. The SPS agreement would also arguably allow for otherwise trade-restrictive domestic regulation necessary for humane animal welfare standards.

And with the Doha round floundering and increasing trade protectionism all-round, measures based on animal welfare might be the subject of new battles over non-tariff barriers in the livestock farm sector. The EU’s proposed ban on seal products on animal welfare grounds is already causing friction with Norway and Canada. See a report.

According to news reports, the Indian Directorate General of Foreign Trade (see website) has banned imports of Chinese toys for six months. And apparently, the notification issued does not give any reasons. Newspapers speculate protectionist reasons, but the Commerce Secretary says it is for public health. But surely, the notification itself should have included the reasons. Indian administrative law would require this, besides WTO obligations. Will China complain or react? Will this fall under the GATT article XX exemption, since there are apparently no existing Indian safety standards for toys to make it a TBT issue? Also, don’t think it raises any SPS issues.

The Indian Express writes:

“We are surprised that the government has taken this step. In most likelihood, it has been done to protect India’s labour engaged in this sector,” said Rajesh Arora, general secretary, Toys Association of India (TAI). “We are following toxicity standards and there is no reason why we should make any such recommendation,” Arora said.

“We are not aware of this development,” said Dinesh Rai, Secretary, Ministry for Small and Medium Enterprises said. The organised sector makes up $1 billion of the total $2.50-billion toy industry. The per capita expenditure on toys in India is just 50 cents, it’s $34 per capita in the US.

The Business Standard article states:

According to industry estimates, Chinese toys account for half the country’s toy market. According to commerce ministry data, toys worth more than $24 million (or Rs 120 crore) were imported in April-June 2008-09.

The Toy Association of India’s President, Raj Kumar said the ban would severely hit imports of Chinese toys, but Indian authorities had likely taken the step in the interest of the economy.

“You see Chinese toys everywhere. The good, upper-end toys are made in India, but the cheap toys in the street and small shops were being dominated by them. They are bringing in toys without safety norms,” he said.

The Press Trust of India writes

While the government notification did not cite the reason for the ban, sources said it was concerned over a rise in imports of toys.
A concern had also been raised over the safety of children playing with the Chinese toys, which were found to be toxic.
Most of the varieties, including wheeled toys, dolls, stuffed toys, toyguns, wooden and metal toys, musical instruments, electric trains and puzzles are covered under the ban.
The Toys Manufacturers Association of India said it was pleasantly surprised by the decision of the Commerce Ministry to prohibit shipments of cheap toys from China.
"We welcome the decision. It is good for the industry," association President Raj Kumar said, adding it is in the interest of the country.
In the face of global downturn, Indian industry has been clamouring for protection from aggressive Chinese manufacturers.
Industry officials said there has been a surge in the import of handicraft and toys by Rs 1,000 crore during April -November 2008.
However, trade expert Arun Goyal said, "The ban would encourage smuggling of toys through Nepal borders. That would be more dangerous… It is bad, especially for the slum children, who an afford the cheap Chinese toys only." PTI

CNN IBN quotesthe Commerce Secretary as citing public health reasons.

A health concern or an economic compulsion? Following India’s the ban on import of milk, milk products and chocolates from China, the Commerce ministry has announced the ban on some Chinese toys for a period of six months.

The commerce secretary has told CNN IBN that, " The reason for the ban is a concern for public health. Chinese toys are known to have high content of poisonous substances like lead."

International and Indian studies in the past have shown that Chinese toys contain high amounts of lead.

In fact, a CNN-IBN special investigation one year ago, tested a random sample of toys for lead.

The results revealed that Chinese toys contained higher levels lead than their Indian counterparts.

The study also showed that the highest content of this heavy metal was in products like teethers for newborn and toddlers.

But its story also suggests possible protectionist reasons.

However, a closer look at the categories that have been banned by the Indian government include items like tricycles, pedal cars, recreational models and puzzles.

These are not necessarily toys that lend themselves to being constantly chewed or ingested- the one way by which lead actually leaches out can cause lead poisoning in children. So it looks like the commerce ministry has other concerns. Many say this temporary ban is a means of providing protection to domestic manufacturers, against cheap competition.

After all, over 70 per cent of all toys sold in India come from China.

Perhaps this is the governments way of heeding distress calls of small scale toys manufactures in a tough economic market.

And CNN IBC drops this interesting piece of information:

Meanwhile chew this fact- India continues to have no safety standard of all toys in India -Chinese or Indian.

An article by Kasturi Das titled “Coping with SPS Challenges in India: WTO and Beyond” looks interesting.

Citation Journal of International Economic Law 2008 11(4):971-1019

Here is the abstract:

The Agreement on the Application of Sanitary and Phytosanitary Measures (SPSA) was negotiated with a view to setting in place an array of multilateral rules that would, on the one hand, recognize the legitimate right of WTO Members to adopt sanitary and phytosanitary (SPS) measures necessary to protect human, animal, or plant life or health, and on the other, enshrine certain checks and balances to cope with the possibility of these measures emerging as non-tariff barriers (NTBs). However, the experiences of developing countries including India with SPS requirements imposed particularly by the developed countries bear testimony to the fact that SPSA has thus far proved rather ineffective in living up to the latter objective. This is largely attributable to the fact that, its dual objective notwithstanding, SPSA has left considerable ‘space’ for WTO Members to use SPS measures for protectionist purposes under the guise of their ‘legitimate’ concerns. This ‘space’ seems to have been further reinforced by the mode of interpretation of SPSA by the WTO Dispute Settlement System. Written against this backdrop, the present article brings to the fore some of the key SPS challenges facing the developing countries by taking India as a case in point and explores certain plausible strategies to cope with such challenges in an effective manner.

The Financial Express reports that India wants the EU to address concerns that the EU’s notification systems for food and non-food safety related concerns operate as significant non-tariff barriers against Indian exports. The EU systems in question are called RAPEX ( Rapid Alert System for non-food consumer products) and RASFF (The Rapid Alert System for Food and Feed). Here’s what the report has to say:

India has now called for lifting of the EU’s Rapid Alert System for Food and Feed (RASFF) and a similar system called RAPEX for non-food consumer products. These rapid alert systems restrict the marketing and use of any such product that is found to be posing serious and immediate danger to consumers’ safety and health by swiftly exchanging information.

According to India, this could be seen as a paranoid reaction from the EU authorities that would potentially harm exports from India. India has pitched for a joint appeal system, whereby affected exporters can file an appeal against a laboratory report given by either EU or India, on the basis of which the consignments are rejected. It has demanded incorporate the two new proposals in the final draft of the FTA.

RASFF and RAPEX fall under both health-related trade restrictions like Sanitary and Phytosanitary measures (SPS) and Technical Barriers to Trade (TBT). While SPS deals with health protection measures of foods and drinks, TNT measures include technical requirements and procedures on most topics from shape of food packages to car safety and energy saving equipments.

As per the officials, what is troubling India is that after one such rapid alert by a country, all other EU member countries would do a thorough check of several subsequent consignments. This adds to delays and costs of exports from India, especially since the EU has not yet unified and electronically linked the customs procedures of member countries.

Belgium, which is the most lenient, does such checks on three subsequent consignments. Greece, the strictest in this regard, has not put any limit on subsequent checks after a rapid alert. Moreover, European buyers are reluctant to purchase any item put on such a rapid alert.

Officials said EU’s measures were acting as non-tariff barriers (NTB) meant to protect their domestic industry. Analysts say that the EU is a leading user of such SPS and TBT measures. India sees it as a non-transparent and protectionist measure, rather than a genuine safety one.

…

Biswajit Dhar, head of the centre for World Trade Organisation (WTO) studies at Indian Institute of Foreign Trade, reckons that the main reason for India insisting on including these new proposals in the FTA would be to create a window for quick disposal of disputes bilaterally, rather than take it to the WTO, which could be a long-winding process.

 

The EU runs training programs on the RASFF. A workshop is scheduled in Thailand on 12-14 June which will be attended by Indian representatives. For more information on this training program see http://training.rasff.com/eventos.aspx

Gruère and Rao, Review of International Labeling Policies of Genetically Modified Food to Evaluate India’s Proposed Rule, in AgBioForum, The Journal of Agrobiotechnology Management & Economics, Volume 10 // Number 1 // Article 6 available here

Abstract

This paper provides a comprehensive review of existing international labeling policies of genetically modified (GM) food and associated relevant international agreements in order to evaluate India’s proposed mandatory labeling rule. Existing evidence from developed countries shows that mandatory labeling regulations have resulted in no additional consumer choice or information. Among the few developing countries with labeling policies, most have not effectively implemented their regulations. We show that India’s proposed labeling rules for GM food would be among the most stringent globally and could potentially result in low consumer benefits at a high cost both domestically and internationally. India’s proposed regulation also lacks a number of elements to be implemented. However, these conclusions are based on experiences from other countries and limited available information from India. More studies are needed to evaluate the potential economic effects of GM food labeling in India.

Also see:

Ramaswami, Biofortified Crops and Biotechnology: A Political Economy Landscape for India, in in AgBioForum, The Journal of Agrobiotechnology Management & Economics, Volume 10 // Number 3 // Article 6 available here

Abstract

Micronutrient deficiencies are responsible for major health problems among the poor in India. Biofortification promises to be a cost-effective approach in enhancing the intake of micronutrients. However, it requires government support in terms of resources and regulatory climate. This paper assesses the political receptivity to biofortification especially when it may involve genetic engineering. The paper draws on an understanding of political economy of pro-poor policies as well as the political responses to Bt cotton—the only GM crop that has received regulatory approval. The paper argues that mainstream political parties are unlikely to take strong positions on biofortified crops�whether in favor or in opposition—unless it affords an opportunity to politically mobilize farmers. If it involves genetic modification, biofortified crops will certainly be opposed by NGOs opposed to biotechnology. The extent of support from the scientific community will depend on whether the health and nutrition community is involved.