New Delhi, Dec 12: In a move that has changed the course of discussion on environmental goods at the WTO, India has proposed a radically different and novel ‘project approach method’ for tariff reduction or elimination and removal of non-tariff barriers (NTB) on such goods. The global market for such goods is estimated to be worth over $250 billion.
India has proposed that services should be linked with goods used for environmental purposes. Besides, it has mooted that a new Designated National Authority (DNA) be set up in every country to approve which goods and sThis new method has almost polarised the discussion at the WTO, with the developed world having pitched for a reduction or elimination of tariffs based on a list of such goods. Developed countries are arguing for a cut or elimination of tariff on 480 environmental goods, which amount to a significant 20% of total items in the Nama list.
But India believes that the list-based method, as proposed by the developed countries, will give them an undue advantage in discussions on Nama and also give them market access to such goods. India got the backing from China, Brazil, South Africa, Argentina, Cuba and some Asean countries after commerce and industry minister Kamal Nath had written to over 30 countries about it, commerce ministry sources told FE.
“If we agree to the list-based approach of the US and the EU, then we will have zero duty on environmental goods of their definition which includes pipes, solar panels, dynamos, fluorescent tubes, fans, air-conditioners etc. This is a backdoor method for gaining an upper hand in Nama negotiations and also to gain more market access. It will wipe out SMEs in developing countries in those sectors,” an official said.
India has suggested that the tariff elimination/cut and removal of NTBs on environmental goods be according to their use in specific projects like cleaning of rivers, equipment for noise reduction, renewable energy, air pollution control and also its allied services. “But concessions cannot be given for a list of goods across the spectrum,” the official added.
Having got the support of the domestic industry and other stakeholders, India is trying to apprise the developed world of this practical and innovative approach. India says,out of the 480 items shown in the list by the developed world, only 7 or 8 can actually be considered as environmental goods.
However, even if developing countries lost out on tariffs by adopting the project-based approach, there would still be gains like getting a cleaner environment through the use of such goods and services as well as a transfer of advanced technology, the officials said.
HERE WE STAND: POLES APART
WHAT DEVELOPED WORLD WANTS
• The developed world asks for a tariff cut on 480 environmental goods, which amount to 20% of the Nama list
WHAT INDIA SUGGESTS
• Relevant services should be linked with goods used for environmental purposes
• Set up new Designated National Authority to approve which goods and services will qualify for tariff cuts
• Tariff cuts and removal of NTBs on environmental goods should be according to their use in specific projects
GAINS FROM INDIA'S FORMULA
• Even if developing countries lose out on tariffs, they will get cleaner environment through use of such goods & advanced technology
ervices will qualify for tariff cuts and how long will the projects be in force.
