Plea to keep plantation commodities in exclusion list under

United Planters Association of Southern India on Thursday expressed serious concern about the Regional Comprehensive Economic Partnership negotiation currently on and sought keeping plantation commodities in the exclusion list under the proposed RCEP.

UPASI fears that any further reduction in import tariff would severely affect price realisation of plantation commodities, putting the plantation sector to further difficulty and distress, its president AL RM Nagappan said in a release.

Plantation commodities like tea, coffee, natural rubber, cardamom, pepper were exposed to international competition since April 2001, when the quantitative restriction was lifted as per the commitments under WTO and signing of ASEAN Agreement in 2009 has further opened up the Indian market to plantation producing countries like Indonesia, Vietnam, Malaysia and Tkhailand, he said.

Under the ASEAN Agreement, the import duties were gradually reduced since 2009 for tea, coffee and pepper while natural rubber, cardamom and few tariff lines on coffee were kept under exclusion list and current import tariff for ASEAN countries is 50 per cent for tea and coffee (100 per cent under WTO for other countries) and 51 per cent for pepper (70 per cent under WT0).

As per UPASI analysis, during 2018-19 the trade deficit in the plantation commodities is Rs.[-] 5,716.64 crore with RCEP countries, which had overall trade surplus in the plantation commodities to the tune of Rs 4,368 crore.

This indicated that plantation commodities will be losing significantly if the RCEP agreement materialised.

There was fear that further reduction in tariff proposed can only worsen the trade deficit in the plantation commodities and will make things miserable for the sector, which is already facing challenging times on account of low prices vis--vis high cost of production, he said.

China, the partner country in the proposed RCEP, posed challenges and it being the largest tea producer and its ability to produce to the needs of the export market in quick time, was an immense threat to the Indian tea sector.

Though China is a largest green tea producer in the world it also produces black CTC teas for the export market and with duty advantage and logistical advantage it may target Indian market, according to him.

Moreover, there was a fear that the Rules of Origin (RoO) criteria will be taken advantage of to route tea through any of the ASEAN countries which have a duty advantage, vis-a-vis China.

The recent instance of Vietnamese pepper coming through Sri Lanka was a case in point in this regard,he said.

While there may be compulsive reasons for the government to go in for trade agreements with other nations/regions, the interests of the domestic plantation industry should be taken care of, especially since large number of people are dependent on this sector, he said.

Given the difficult situation prevailing in the plantation sector, it is hoped that the plantation commodities will be kept under the exclusion list under the proposed RCEP as otherwise, it would have serious implications for this highly labour-intensive agro-industry, Nagappan added.

The RCEP bloc comprises 10 Association of South East Asian Nations (Asean) group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners - India, China, Japan, South Korea, Australia and New Zealand.