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India flays EU for trade barriers on agri exports, service providers

D Ravi Kanth  |  Geneva 

India today chided the European Union for continuing to maintain a range of trade barriers on India’s agriculture exports as well as service providers under Mode 4 of short-term movement of service suppliers, Business Standard was told.

During the EU’s ninth trade policy review meeting at the World Trade Organization, an Indian trade official took Brussels to task for imposing what are called ‘standards’ concerning of aflatoxin in spices, processed food, ground nuts and cereals among other items.

These standards, the Indian official said, slapped burdensome requirements on Indian exporters who found it technically and economically unfeasible to implement them, given the high costs involved.

The EU’s Food Safety Authority had rejected India’s agricultural exports under the guise of testing and certification requirements and labeling norms. These practices “led to huge commercial losses for Indian exporters,” India complained.

China, Brazil and several other developing countries joined India in “exposing” the EU’s new standards

The trade policy review offers a platform to members to point out the difficulties their exporters are encountering in the country under review.

While every developing country’s trade policy is subjected to a review once in four years, the developed countries will have to appear before members once in two years.

Members can raise oral and hundreds of written questions about the specific problems faced by their exporters.

Ahead of the meeting, the Secretariat issued a report cataloguing Brussels’ macro-economic and trade policies as well as the continued tariff and non-tariff barriers that are in place.

Though the has adopted several open and liberal policies in both trade in goods and trade in services, it also maintains insidious barriers on agriculture imports, chemicals, and trade in services, analysts said.

“The will continue to show leadership on global trade and stand firm against protectionism,” said EU trade commissioner Catherine Ashton, arguing that Brussels was committed to “multilateralism, to transparency, and to open markets based on rules that benefit developed and developing countries.”

Being the world’s largest market, the EU was not only quizzed on a range of barriers that cover trade in goods and services, but was also showed the “dark side” of its overall trade regime, said an Asian trade diplomat.

The EU, for example, has in place restrictions on Indian banks starting their operations in its member states. Brussels also imposed what are called Mode 4 restrictions, such as 3-6 years of professional experience for contractual suppliers and independent professionals, India said.

India drew attention to barriers in the form of non-harmonised service regulations that inhibit Indian services providers to move from one member country to the other. In a large number of EU member nations, there are requirements of number of board members to be residents, which raises costs for service providers.

The EU also failed to provide a level-playing field for foreign telecom companies, India noted. As “the EU mandate deems the Research and Development sector as mandatory for domestic job creation because of which it is hesitant in allowing free interdisciplinary movement”, only 34 per cent of researchers are non-EU.

First Published: Tue, April 07 2009. 01:08 IST