WORLD TRADE
ORGANIZATIONTN/MA/W/10
22 October 2002
(02-5762)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Submission by India
The following document, dated 18 October 2002, has been received from the Permanent
Mission of India.
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Introduction
1. Paragraph 16 of the Doha Ministerial Declaration on Market Access for Non-agricultural
Products provides a clear mandate for negotiations on this important subject. It require members to
aim “…to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff
peaks, high tariffs and tariff escalation, as well as non-tariff barriers, in particular on products of
export interest to developing countries.” These negotiations, further are to take fully into account the
special needs and interests of developing and least developed countries, including through less thanfull reciprocity in reduction commitments, in accordance inter alia  with the provisions of
Article XXVIII bis of GATT 1994. India would like to offer some preliminary thoughts on carrying
forward this mandate. This is without prejudice to India submitting more detailed papers later on, on
the issue of modalities and other aspects.
Background
2. Unlike in earlier rounds, developing countries, fo r the first time, participated fully in the tariff
reduction commitments under the Uruguay Round. It has been well recognised that the tariff cuts
taken by developing countries during the Uruguay Round were very substantial and when measured
by how they will affect importers’ expenditure were deeper than those of the developed countries
1. In
return, however, tariff reductions on items of particular interest to them got less attention in thedeveloped markets. The tariff cuts in the developed countries on industrial products except petroleum
imported from the developing and least developed countries were lower as compared to the cut on
imports from all sources
2.
3. It would be important to ensure this time around that substantial gains accrue to the
developing countries.
                                                     
1 The Unbalanced Uruguay Round Outcome: The New Areas in Future WTO Negotiations –
Julio J. Nogués, and J. Michael Finger: World Bank Working Paper No. 2732 December 2001 & The Ur uguay
Round: Statistics on Tariff Concessions Given and R eceived - J. Michael Finger, Merlinda Ingco and Ulrich
Reincke: World Bank September 1996
2 The Results of the Uruguay Round of Multi lateral Trade Negotiations: GATT Secretariat,
November 1994.TN/MA/W/10
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Approach
4. Any approach decided upon for carrying forward the Doha mandate will have to address its
essential elements. From a developing country perspective,  it will be important to ensure that:
a) the approach fully integrates the ‘less than full  reciprocity’ concept in all aspects, not merely
in a longer implementation period;
b) tariff peaks, tariff escalation and non-tariff measures are effectively dealt with in products of
particular export interest to developing countries;
c) the fiscal, developmental, strategic and other needs of developing countries are fully taken
into account as required inter alia  by paragraph 3 (c) of Article XXVIII (bis)  of
GATT (1994); and
d) special needs of economic development of developing countries including where there are
labour intensive small scale enterprises are kept in view.
Preliminary thoughts on modalities for tariff reduction commitments
5. For bound tariff lines, reduction commitments should commence from the last negotiated
level of bound commitments.
6. For unbound items, which are generally more sensitive than their bound counterparts, the
approach should include the following:
a) An increase in the binding coverage with no a priori  exclusion of product groups.
Provision should however exist for developing countries to continue to maintain certain
domestically sensitive products as unbound; and
b) For unbound tariff lines, which are to be bound, there should be the flexibility to bind
them above the current level of applied tariff and the modality should include taking into
consideration the autonomous liberalisation since the time when the Uruguay Round
negotiations effectively came to a close. There should also be the flexibility for such tariff
lines to be bound at rates which are generally above the higher of  the bound rates
prevailing for bound items in a country’s tariff schedule.
7. As for modalities for tariff reductions, several approaches have been suggested including
request and offer, formula approaches, or a sectoral  approach involving ‘harmonisation’ or ‘zero for
zero’ methods etc. Some suggestions have also been made for having a combination of these
approaches. While India’s views on the subject are still evolving, the following aspects may need
greater understanding and clarity:
a) In any request and offer approach between a developing country and a developed country,
there is a potential for the former to be faced with excessive demands for any request it
may submit while in fact the mandate calls for less than full reciprocity. Can some
guidelines be set out? Will ‘request and offer’ approaches be limited to items where
countries hold substantial or principal supplier status or can it cover other products aswell? It will be important to have clarity on these issues.
b) There have also been suggestions for followin g a sectoral approach in the negotiations. In
this context, it needs to be kept in view th at developing countries in general have higher
levels of tariff both on account of their revenue needs as well as to afford some measure
of protection to their industry which does not enjoy a level playing field owing to lack ofresources, older technology, high interest rates and infrastructural and other constraints.
In the above context, if a ‘Zero for Zero’ approach is attempted even in a few limited
sectors, this can cause serious distortions in a developing economy as indicated below:TN/MA/W/10
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(i) The average tariff of developed countries in most of the sectors being proposed
for ‘zero for zero’ approaches is around 3-5%. Bringing them down to zero will
not involve any significant reduction. This is not the case with developing
countries and if implemented many may face sharp drops in their revenue
collection.  It would also be unfair to their domestic industries which have to putup with many constraints.  Some level of tariff protection is also required to
attract investments.
(ii) Product coverage of ‘zero for zero’ initiatives would include raw materials,
intermediates and final or finished products.  Raw materials and components
usually are common inputs for several manufacturing sectors, some of which may
not be so covered by sectoral initiatives. The net effect in such cases can beseriously unsettling by creating differential effective rates of protection and
which will in turn affect the balance between efficiency and fair competition that
may currently be in play amongst producers of the different raw materials or
components. While this may not be the case for countries at more advanced
stages of development or where the tariff rates are uniformly low, this wouldseriously harm developing countries where the zero tariff following a sectoral
initiative sharply contrasts with the relatively higher level of tariff protection on
related or similar products.
(iii) Any significant use of ‘zero for zero’ approach could also lead to an unbalanced
overall result favouring major trade partners, whose main tariff reduction
contributions may then get diverted to areas which are not of particular export
interest to developing countries. Elimination of tariff peaks in areas of export
interest to developing countries, a key element of the Doha mandate, may not
then receive the required attention.
c) As for formula approaches it has to be clarified as to how circumstances obtaining in
developing and least developed countries will be taken into account. An analysis needs to
be undertaken in particular on how the developmental, fiscal, strategic and other needs of
developing and least developed countries would be factored in. The special needs of the
labour intensive small scale enterprises in developing countries would also have to be
kept in view.
Non -tariff measures8. India attaches great significance to the removal of specific non-tariff barriers on tariff lines of
particular export interest to developing countries. By their nature, NTMs do not lend themselves tosecuring commitments that can be easily defined or monitored. To the extent there can be some
creative ideas in this regard it would be useful. Compilation of comprehensive data with regard to
NTBs is an essential requirement for furthering discussion in this area. India would, however, caution
against the inclusion of legitimate instruments that developing countries may use under the various
WTO agreements for development of their industries. For instance, export tariffs or levies aregenerally used to generate resources to develop an industry by diversification in the product profile
and development of value added products for exports. Therefore, the suggestion that ‘export duties’
be negotiated would be outside the Doha mandate.TN/MA/W/10
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Environmental Goods
9. The product coverage on environmental goods would need to be discussed in the light of the
products of export interest to developing countrie s including LDCs and may also include environment
friendly products. India is, however, opposed to including products in this category on grounds ofproduction and process method considerations.
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