agriculture negotiations in wto : state of play the global food scenario and the linkage with ... l...

Vol. 9April - June 2008

Geographical Indication - FAQs 2

Preferential Rules of Origin 5

Workshop on role of Standards 7

Workplan April - June 2008 7

Trade Promotion Mechanisms 8

I N S I D E

Tier-I Partner

Agriculture Negotiations in WTO : State of Play

Revised Draft Modalities for Agriculture Released by the Chair of Agriculture Committee on May 19, 2008

A major goal of the Doha Development Agenda was to correct the fundamental structural flaws in global agricultural trade perpetuated through developed countries’ lavish subsidies to their farmers. Doha Round was an opportunity to altogether eliminate Overall Trade Distorting Domestic Support (OTDS). The Hong Kong Ministerial settled for steep and effective cuts in OTDS. This goal seems to be vanishing. In the revised draft modalities for agriculture released by the Chair of Agriculture Committee on May 19, 2008, the lowest number for the US ($ 13 billion) is nearly double the current applied levels of domestic support which provides for 100% headroom as a cushion.

In the Chair’s proposals on Special Products, the lower cap number of total Special Products had been arbitrarily reduced from 12 to 8 per cent. In April 2008, the US and a few other countries had made such a proposal but this did no enjoy support from any country other than the proposers. While there seemed to be an attempt to raise the level of ambition on this core concern of developing countries, there was no concurrent movement either in reducing Overall Trade Distorting Domestic Support or the percentage of Sensitive Products, on which the proposals have remained frozen since July, 2007. This is upsetting.

Another major area of concern in agriculture for developing countries is the issue of Special

Change of Guard at APEDA

Mr Asit Tripathy, an IAS officer of 1986 batch, Orissa cadre, has been appointed Chairman of APEDA, succeeding, Mr K S Money. He took over his responsibilities with effect from February 11, 2008.

Graduate and M.Phil degree holder from Jawaharlal Nehru University, Mr Tripathy completed his LLB while pursuing service and additionally earned an MBA degree from ICPE, Slovenia in Europe.

Prior to joining APEDA, Mr Tripathy has served as Secretary Tourism and M.D.Orissa Tourism Development Corporation where he earned the respect of his seniors and appreciation of his juniors. Perfectly fit for his role as Chairman, APEDA, he brings with him proven experience and leadership qualities. Over the years he has held a number of important positions in the state in different arenas and has been principally responsible for the development of industrial infrastructure, infrastructure industrial financing and promotion, Orissa Hydro Power and Energy Department.

Under his dynamic leadership APEDA is sure to grow by leaps and bounds as he builds on the excellent work done by Mr K S Money over the past five years

Safeguard Mechanism (SSM). The draft proposals on SSM, including the absurdly low number of products for which the SSM could be invoked during a year, the threshold levels for the price and volume triggers and the cross-check between the two independent triggers, are even more stringent than proposals for the Special Safeguards, which are going to be used primarily by developed countries. The SSM proposals are completely out of step with ground realities in the developing world and there is no way the developing countries could accept them in their present form.

On other market access issues in agriculture, there is palpable lack of balance between agriculture and NAMA, as reflected in the extremely tentative proposal on tariff simplification and the non-existence of any proposal on tariff capping, despite near unanimous support of the developing countries and some developed countries for such proposals. Many developed countries are intent on using compound, mixed and complex tariffs as an additional and non-transparent layer of protection.

Published under the Project on “Strategies & Preparedness for Trade & Globalisation in India”

GEOGRAPHICAL INDICATION - FAQs

They are also not willing to accept caps on their agricultural tariffs even at levels of 100% - 150% at the end of the Doha Round, while expecting developing countries to convert all industrial tariffs in ad valorem terms cap these at the level of 26% or below for almost all products. This imbalance is not in accordance with the Hong Kong Ministerial declaration.

On the global food scenario and the linkage with subsidies in developed countries, developing countries have no alternative but to produce more food in the coming years. Trade distorting subsidies in agriculture have to be reduced much faster than proposed currently so as to send the right signals to developing country farmers. While the Trade Ministers of major developed nations have recently spoken of ameliorating the food crisis through accelerated reduction of domestic subsidies and agricultural tariffs in the Doha round, these has been a studied reluctance on their part to get these recent promises converted into concrete proposals in the draft text.

Every region has its claim to fame. Christopher Columbus sailed from Europe to chart out a new route to capture the wealth of rich Indian spices. English breeders imported Arabian horses to sire Derby winners. China silk, Dhaka muslin,Venetian Glass all were much sought after treasures. Each reputation was carefully built up and painstakingly maintained by the masters of that region, combining the best of Nature and Man, traditionally handed over from one generation to the next for centuries. Gradually, a specific link between the goods and place of production evolved resulting in growth of geographical indications.

In December 1999, the Parliament had passed the Geographical Indications of Goods (Registration and Protection) Act,1999. This Act seeks to provide

for the registration and better protection of geographical indications relating to goods in India. The Act would be administered by the Controller General of Patents, Designs and Trade Marks- who is the Registrar of Geographical Indications. The Geographical Indications Registry would be located at Chennai.

1. What is a Geographical Indication?

l It is an indication

l It originates from a definite geographical territory.

l It is used to identify agricultural, natural or manufactured goods

l The manufactured goods should be produced or processed or prepared in that territory.

l It should have a special quality or reputation or other characteristics

2. Examples of possible Indian Geographical Indications.

l Basmati Rice

l Darjeeling Tea

l Kanchipuram Silk Saree

l Alphanso Mango

l Nagpur Orange

l Kolhapuri Chappal

l Bikaneri Bhujia

l Agra Petha

3. What is the benefit of registration of geographical indications?

l It confers legal protection to Geographical Indications in India

l Prevents unauthorised use of a Registered Geographical Indicat ion by others

l It provides legal protection to Indian Geographical Indications which in turn boost exports.

l It promotes economic prosperity of producers of goods produced in a geographical territory.

4. Who can apply for the registration of a geographical indication?

Any association of persons, producers, organisation or authority established by or under the law can apply:


l The applicant must represent the interest of the producers

l The application should be in writing in the prescribed form

l The application should be addressed to the Registrar of Geographical Indications alongwith prescribed fee.

5. Who is a registered proprietor of a geographical indication?

l Any association of persons, producers, organisation or authority established by or under the law can be a registered proprietor.

l Their name should be entered in the Register of Geographical Indication as registered proprietor for the Geographical Indication applied for.

6. Who is an authorised user?

l A producer of goods can apply for registration as an authorised user

l It must be in respect of a registered geographical indication

l He should apply in writing in the prescribed form alongwith prescribed fee

7. Who is a producer in relation to a Geographical Indication?

The persons dealing with three categories of goods are covered under the term Producer:

l Agricultural Goods includes the production, processing, trading or dealing

l Natural Goods includes exploiting, trading or dealing

l Handicrafts or Industrial goods includes


making, manufacturing, trading or dealing.

8. Is a registration of a geographical indication compulsory and how does it help the applicant?

l Registration is not compulsory

l Registration affords better legal protection to facilitate an action for infringement

l The registered proprietor and authorised users can initiate infringement actions

l The authorised users can exercise the exclusive right to use the geographical indication.

9. Who can use the registered geographical indication?

An authorised user has the exclusive rights to the use of geographical indication in relation to goods in respect of which it is registered.

10. How long the registration of Geographical Indication is valid?

The registration of a geographical indication is valid for a period of 10 years.

11. Can a Geographical Indication be renewed?

It can be renewed from time to time for further period of 10 years each.

12. What is the effect if a Geographical Indication if it is not renewed?

If a registered geographical indication is not renewed it is liable to be removed from the register.

13. When is a registered Geographical Indication said to be infringed?

When an unauthorised user uses a geographical

indication that indicates or suggests that such goods originate in a geographical area other than the true place of origin of such goods in a manner which mislead the public as to the geographical origin of such goods.

When the use of geographical indication result in an unfair competition including passing off in respect of registered geographical indication.

When the use of another geographical indication results in false representation to the public that goods originate in a territory in respect of which a registered geographical indication relates.

14. Who can initiate an infringement action?

The registered proprietor or authorised users of a registered geographical indication can initiate an infringement action.

15. Can a registered geographical indication be assigned, transmitted, etc?

l No. A geographical indication is a public property belonging to the producers of the concerned goods.

l It shall not be the subject matter of assignment, transmission, licensing, pledge, mortgage or such other agreement

l However, when an authorised user dies, his right devolves on his successor in title.

16. Can a registered geographical indication or a registered authorised user be removed from the register?

Yes. The Appellate Board or the Registrar of Geographical Indications has the power to remove the geographical indication or an authorised user from the register. Further, on application by an aggrieved person action can be taken.


PREFERENTIAL RULES OF ORIGIN

17. How a geographical indication is different from a trade mark?

l A trade mark is a sign which is used in the course of trade and it distinguishes goods or services of one enterprise from those of other enterprises.

l Whereas a geographical indication is an indication used to identify goods having special

characteristics originating from a definite geographical territory.

Fo r more i n fo rma t i on p l ea se v i s i t www.ipindia.nic.in or address your queries to :

The Registrar of Geographical Indication,Guna complex, No.443/304 Anna Salai,Te y n a m p e t , C h e n n a i - 6 0 0 0 0 1 8 Phone : 044 -4314293 /94 /95 /96 /97 /98

The majority of trade is being made through the channel of Regional Trade Agreements. India is also aggressively negotiating Regional Trade Agreements with a number of countries, custom union or trade blocs. Preferential Rules of Origin are contained in all the regional trade agreements to ensure preferential tariffs are confined to members, to prevent trade deflection and to encourage trade creation.

To stabilize the food prices in domestic market, some developing countries have restricted the free export of a few agriculture primary produce and some countries including developed countries have reduced import duty for a few required primary agriculture produce.

Origin is the “economic” nationality of goods traded in commerce; it is necessary to determine the nationality and tariff classification of goods in order to be able to determine the duties and equivalent charges or any customs restrictions or obligations applicable to them. No product shall be deemed to be a produce or manufacture of either Party unless the conditions specified in these rules are complied with in relation to such products, to the satisfaction of the authority issuing the certificate of origin.

There are two kinds of origin, non – preferential and preferential and the customs treatment of goods at importation is determined by the origin they have. The preferential rules simply allow a determination of whether a good is originating in a Regional Trade Agreement / Free Trade Agreement member or not; we have not to determine the “official” originating country if the goods are not being originated from the partner country. The non – preferential rules of origin allow a determination of the “official” originating country when this is not the country of export; Non – Preferential rules of origin are used in determining whether or not goods are subject to anti – dumping and countervailing duties, safeguard measures or quantitative restrictions and for statistical purposes.

So, Non – preferential origin merely confers an “economic” nationality on goods and does not confer any benefit on them. Non – preferential origin is obtained either by the goods being “wholly obtained” in one country or, when two or more countries are involved in the manufacture of a product, origin is obtained in the country where the last substantially, economically justified working or processing is carried out. Non – preferential origin is used, for example, in determining whether or not goods being imported are subject to anti – dumping measures or quantitative restrictions and


for statistical purposes. It can also be used to determine origin in the context of the “origin marking” of goods.

Preferential origin is conferred on goods from particular countries when they have fulfilled certain criteria. Preferential origin criteria generally demand that goods undergo more working or processing than is required to obtain non-preferential origin. However, wholly obtained goods can also benefit from preferential origin status. Preferential origin confers certain benefits on goods traded between countries that have agreed such an arrangement, usually entry at a reduced rate or free of duty.

Subject to the provisions of Insufficient Operations and Accumulation that the final process of manufacturing is performed within the territory of the exporting party, products would be considered as originating if:

(a) (i) The total value of the materials, parts or produce originating from countries other than the Parties or of undetermined origin used in the manufacture of the product does not exceed 60 % of the FOB value of the product so produced or obtained; and,

(ii) The product so produced or obtained is classified in a heading, at the four digit level, of the Harmonised System different from those in which all the non – originating materials used in its manufacture are classified; or

(b) The product satisfies the Product Specific Rules of Origin.

EU and US, both are the main two blocs for setting preferential rules of origin (RoO). PANEURO and NAFTA have tough origin regulation for Rules of Origin. Most of the Asian countries use the language of NAFTA in their draft of Product Specific Rules of Origin.

The success of regional trade agreement, in terms of net-trade creation and welfare, would depend

to a large extent on its rules of origin. The margin of preference attracts the business community to comply with the Preferential Rules of Origin. If the margin of preference is not large enough to offset administrative burden of complying with the rules, the exporters may choose to forgo the preferential rates offered under Regional Trade Agreements. The margin of preference being offered by India to its partner countries have been analysed as a part of this paper.

On the basis of survey of different legal agreements, discussions with various stakeholders, farmers union and data of various Ministries of Government of India and Government departments; Regarding Product specific rules of origin for Fish and Processed Agricultural Products, the following is suggested:

a) India is good in producing basic agricultural produces; we have large head counts and wide coastal area. So, we should save our farmers and growers of primary products by placing wholly obtained condition in Product Specific Rules of Origin for primary agriculture products.

b) Our processing industry is running efficiently, and to save this we should have condition like “domestic value addition” and wholly obtained primary agricultural product condition in Product Specific Rules of Origin.

c) To make the more value additions in primary and intermediate agricultural products, the two stages processing for the final or ready to eat products have been adopted. By facilitating more value addition in agri-processing industry, this industry may be made a revenue earner for larger section of our agriculture based society. By this, our tertiary industry will be forced to streamline their supply chain and to make more value addition for getting the economy of scale.

(Based on the study conducted by Mr. Rajay Agrawal and submitted by him to the Institute of Chartered Accountants of India).


APEDA organized workshops on Role of Standards in the Exports of Agro Products and Sharing of Experience on Non-Tariff Measures. The faculty included besides APEDA, the experts from Bureau of Indian Standards, Directorate of Marketing & Inspection, Export Inspection Council & Spices Board. The workshops were organised at the following places:

WORKSHOP ON ROLE OF STANDARDS

Shri A.K. Gupta, Advisor WTO, APEDA, addressing the participants. Shri A. Ravindra from APEDA, Bangalore is seen in the centre with Shri Khurana Joint Agriculture Marketing Advisor at Kochi.

Narrative Summary

1. Portal – Agri trade junction(Ongoing activity)

2. Quarterly Newsletter – Agri Trade Info 9th

issue for the Quarter April – June 08 (Ongoing activity)

3. Workshop on Good Agricultural Practices for Export Production of Makhana in Bihar

4. Study to examine the impact of various GSP Schemes on exports of agricultural & processed food products.

5. Workshop in Orissa for Rice

6. Workshop on Floriculture at Hosur in March 2008

7. Workshops at two locations for increasing the awareness about standards in Poultry products

Objectively Verifiable Indicators (OVIs)

Comprehensive international market intelligence

Improved level of information with the stakeholders

Proposal of Tier-II partner, M/s. Agricultural Finance Corporation Ltd. Based on Diagnostic study conducted by them under this project

Final report of the study

Proposal of Tier II Partners – Orissa Project & Marketing Development Centre, Cuttack.

Proposal of Tier II Partners – M/s. Sharaz Farm Academy

To be organized by APEDA directly with the help of regional offices

Hyderabad 28th December, 2007

Delhi 5th January, 2008

Mumbai 18th January, 2008

Cochin 24th January, 2008

WORKPLAN APRIL - JUNE 2008

Printed & Published by: A.K. Gupta, Advisor WTO (Editor), Agricultural and Processed Food Products Export Development Authority, 3rd Floor, NCUI Building

3, Siri Institutional Area, August Kranti Marg (Opp. Asiad Village), New Delhi - 110016, Tel.: 011-26513204, 26534191, Fax: 011-26526187Email: [email protected], Website: www.apeda.com

Compilation & Editorial Support by Tier-II Partner: National Centre for Trade Information, NCTI Complex, Pragati Maidan, New Delhi - 110001Tel.: 011-23371948 / 50, Fax: 011-23371979, Email: [email protected], Website: www.ncti-india.com

Printed at: Archana Advertising Pvt. Ltd., C-78, Okhla Industrial Area, Phase-I, New Delhi - 110020, Tel.: 011-26819387

Harmonisation, Equivalence and Mutual Recognition Agreement

The three trade promotion mechanisms are closely related but are not interchangeable. Harmonization and equivalence are both methods for bringing about regulatory convergence or uniformity. Harmonization takes two differing standards or procedures and converts them into one.

Equivalence allows two differing standards or procedures to remain intact but treats them as if they were the same because in theory they produce the same or similar results. Equivalence encourages countries to recognize that different procedures (e.g., inspection, certification, testing, surveying, trapping, fumigation, and other treatments or practices) can be used to achieve the level of protection demanded by the importing country. The burden is on the exporting country to objectively demonstrate that its system or practices, while different from the importing country's measures, still achieves the importing country's plant quarantine security goals.

A Mutual Recognition Agreement or MRA is an international agreement by which two or more countries agree to recognize one another's . MRAs exists e.g., between regulatory (i.e. government to government) and non-regulatory bodies (i.e. private sector). In addition, MRAs could be multisectoral or focus on a single sector.

Mutual recognition is a vehicle for regulatory cooperation, and it may be based on harmonization, equivalence, or external criteria such as the importing party’s standards or international standards. In a mutual recognition agreement, two or more parties agree to recognize and accept each other’s conformity assessment results, test reports, certificates, product standards, regulations, markings, quality assurance system standards because they are harmonized or judged to be

equivalent, or because they satisfy other agreed-upon external criteria. Thus, mutual recognition can stand alone on the basis of the importing country’s standards or it can translate harmonization or equivalence determinations into benefits for trade.

With respect to consumer products, MRAs are agreements between countries to recognize and accept the results of conformity assessments performed by conformity assessment bodies (CABs) of the countries that are parties to the agreement. Conformity assessment is the process by which products are measured against the various technical, safety, purity, and quality standards that governments impose on products. The basis of this mutual recognition is the use of the importing country’s tests and standards. Such MRAs allow an exporting country’s CABs to use the tests and standards of the importing country in evaluating products, thereby potentially reducing the number of CABs that must evaluate a product destined for multiple markets.

Conformity assessment procedures

Conformity assessment is the name given to the processes that are used to demonstrate that a product (tangible) or a service or a management system or body meets specified requirements. These requirements are contained in ISO/IEC standards and guides. The processes that need to be followed to be able to demonstrate that they meet the requirements are also contained in ISO/IEC standards and guides.

Conformity assessment can cover one or more of the following activities:

Testing

Inspecting

Implementing

TRADE PROMOTION MECHANISMS

agriculture negotiations in wto : state of play the global food scenario and the linkage with ... l...

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