The Hindu : Business : `Standards have become market entry barriers'

Online edition of India's National Newspaper
Tuesday, Apr 13, 2004

Business

Business

`Standards have become market entry barriers'

By Our Special Correspondent

NEW DELHI, APRIL 12. Standards laid down by the Government and the private sector are becoming market entry barriers for developing countries with as much as 90 per cent of goods facing some standard or another. Despite the launch of a zero duty regime or quota free system in the case of several products, market access is still difficult for developing countries, said the UNCTAD Director, International Trade, Lakshmi Puri, here today. Mr. Puri said the introduction of these standards had the impact of closing markets. Thus even with a quota free regime, she said the scenario in many countries was one of "100 per cent market access and zero per cent market entry.''

She said an UNCTAD (United Nations Conference on Trade and Development) study has found that about that about 80 per cent of the standards for goods imposed in developed countries were voluntary and by the private sector. The standards, introduced on the grounds of health, consumer interests, environment and labour, were set up by the private sector rather than the Government, she noted.

In many cases, she said the standards were much higher than those laid down by the International Labour Organisation (ILO). Referring to the concept of "social conditionalities,'' she said these had not been introduced at the World Trade Organisation but had become a market reality in the developed world.

Speaking on the launch of the second component of the programme on "strategies and preparedness for trade and globalisation in India,'' she said the effort was now to inform stakeholders about the main issues, consolidate their viewpoints and give feedback to the Government. The project has been launched by UNCTAD in collaboration with the Indian Government and the British development agency, DFID.

Ms. Puri said one of the issues being discussed was the fact that trade negotiations were not taking into account market realities. This include the control of markets by large retailers in many sector including even tourism, where a small number of operators dominated the market. Similarly, in the case of standards, which had become entry barriers, she said they arise from interpretation of various sanitary and phytosanitary standards (SPS) allowed under WTO rules. These are often unilateral, she pointed out and had the impact of closing markets even where there is a quota free regime, and indications are that such entry barriers are likely to go up.

The UNCTAD director said the second phase of the project would adopt a sectoral approach. The five sectors selected for the special focus include textiles and clothing, tourism services, handicrafts, agriculture and fisheries. These areas are considered more integrated with international trade than others. The exercise is aimed not only at building capacities in terms of the multilateral trading system but also to enhance preparedness in the backdrop of regional trading agreements and special preferences given to countries like least developed countries (LDCs).

Regarding the forthcoming UNCTAD conference in Sao Paulo in Brazil, she said there would be a special session based on the India-Mercosur Preferential Trading Agreement as it is being viewed as a case study for South-South cooperation. The main theme of the conference being held in June is "enhancing coherence between trade and development strategies and global economic processes towards economic growth and development particularly of developing countries.''

Printer friendly page
Send this article to Friends by E-Mail

Business