1 / 21

Uttam Deb Principal Scientist (Economics), ICRISAT and Additional Director (on leave),

International Conference on SAARC@25 Organized by RIS and IIC 16-17 September 2010; New Delhi. Trade in Goods: Progress and Impediments. Uttam Deb Principal Scientist (Economics), ICRISAT and Additional Director (on leave), Centre for Policy Dialogue. Contents.

diallo
Télécharger la présentation

Uttam Deb Principal Scientist (Economics), ICRISAT and Additional Director (on leave),

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. International Conference on SAARC@25 Organized by RIS and IIC 16-17 September 2010; New Delhi Trade in Goods: Progress and Impediments Uttam Deb Principal Scientist (Economics), ICRISAT and Additional Director (on leave), Centre for Policy Dialogue

  2. Contents Section I: Introduction Section II: State of Intra-regional Trade among SAARC Countries Section III: Impediments in Intra-SAARC Trade Section IV: Way Forward 2

  3. I: INTRODUCTION • “I believe we should challenge ourselves by acknowledging that the glass of regional cooperation, regional development and regional integration is half empty.” • “Intra-regional trade flows have grown and transport and telecommunication links have expanded. Yet, the share of intra-regional trade and investment flows in total trade and investment flows in South Asia is far below what we see in East and South-east Asia. It is also well below the potential”. Dr. Manmohan Singh Prime Minister of India At the 16th SAARC Summit in Thimphu, Bhutan 28 April 2010 3 3

  4. I. Introduction • Group of Eminent Persons (GEP), constituted by the SAARC leaders, articulated a comprehensive road map towards an Economic Union in South Asia by 2020, through transition from • preferential arrangement (PTA) to • free trade area (FTA) to • Customs Union (CU), to common market (CM) to • a Economic Union (EU) in the span of about two decades. • The Road Map was placed at the tenth SAARC Summit held in Colombo in 1998. 4 4

  5. II. State of Intra-regional Trade among SAARC Member Countries SOUTH ASIA'S INTRA AND EXTRA-REGIONAL TRADE IN 2008 Source: Hossain et al (2010) 5

  6. II. State of Intra-regional Trade among SAARC Member Countries Dynamics of Intra-SAARC Export, Import and Trade as % of Global Relevant Indicators of SAARC Countries Source: Rahman (2010) 6

  7. II. State of Intra-regional Trade among SAARC Member Countries SOUTH ASIA'S EXPORT TO DIFFERENT REGIONS (Million US$) Source: Moazzem and Mahmud (2010) 7

  8. II. State of Intra-regional Trade among SAARC Member Countries Intra-regional Exports of South Asian Countries in 2008 (in million USD) Source: Rahman (2010) 8

  9. II. State of Intra-regional Trade among SAARC Member Countries Intra-regional Imports of South Asian Countries in 2008 (in million USD) Source: Rahman (2010) 9

  10. II. State of Intra-regional Trade among SAARC Member Countries • Taneja (2004, 2005) has estimated that total informal trade in South Asia is worth US $1.5 billion, which is 72 per cent of formal trade (for the years for which data were available) • The SAARC region experienced accelerated growth in intra-regional trade during 2006 to2008; however, extra-regional trade grew at a faster rate during the same period (Moazzem and Rahman, 2010). 10

  11. III. Impediments in Intra-SAARC Trade • Limited product coverage and the extensive nature of negative lists • Non-tariff Barriers (NTBs) • Lack of intra-industry trade • Lack of trade facilitation • Energy scarcity 11

  12. III. Impediments in Intra-SAARC Trade Limited product coverage and the extensive nature of negative lists Source: Annex 1, SAFTA Agreement.

  13. III. Impediments in Intra-SAARC Trade Limited product coverage and the extensive nature of negative lists • India has a moderately low number of items on the sensitive list for non-LDCs, but it has the largest per cent of tariff lines in categories for vegetable products (20.2 per cent) and textile products (34.2 per cent). • India’s import of these items from South Asian countries constitutes only 12 per cent of its world imports (Taneja et. al., 2007). • About 53 per cent of the total import trade in SAFTA members has been subject to the negative list of the respective countries (Sawhney, 2008). • India and Sri Lanka have restricted up to 38 and 52 per cent respectively of their total imports by value from other SAFTA members under the sensitive list category (Sawhney, 2008). • The limited product coverage and the extensive nature of negative lists decrease the scope for intra-regional trade in South Asia (Rahman and Shadat, 2006).

  14. III. Impediments in Intra-SAARC Trade Limited product coverage and the extensive nature of negative lists India has a moderately low number of items on the sensitive list for non-LDCs, but it has the largest per cent of tariff lines in categories for vegetable products (20.2 per cent) and textile products (34.2 per cent) (Rahman, 2010) India’s import of these items from South Asian countries constitutes only 12 per cent of its world imports (Taneja et. al., 2007). About 53 per cent of the total import trade in SAFTA members has been subject to the negative list of the respective countries (Sawhney, 2008). India and Sri Lanka have restricted up to 38 and 52 per cent respectively of their total imports by value from other SAFTA members under the sensitive list category (Sawhney, 2008). The limited product coverage and the extensive nature of negative lists decrease the scope for intra-regional trade in South Asia (Rahman and Shadat, 2006). 14 14

  15. III. Impediments in Intra-SAARC Trade Percentage Share of Specific NTBs to all NTBs in SAARC SAARC countries have in place several ad hoc restrictions and NTBs on imports. The general consensus has been that whilst SAFTA had failed to address NTB issues, the SAFTA Agreement also is yet to address the NTB issues squarely and with due diligence (Rahman 2010) 15

  16. Lack of Trade Facilitation III. Impediments in Intra-SAARC Trade • Lack of adequate transit facilities • for Bangladesh (from Nepal and Bhutan via India), for India (from north east states to western states of India through Bangladesh) and for Pakistan (to Bangladesh through India) • Infrastructure Related Constraints • Lack of physical, industrial, and communication infrastructure in the region had restricted trade in South Asia • While it takes 2 hours to clear a vessel in Singapore and Laem Chabang, Thailand, it takes 2-3 days in Chittagong • At Delhi airport, average cargo dwell time is 2.5 days • A UNESCAP study conducted on South Asian Trade in 2007 found that disparity in infrastructure facilities has indeed been increasing over the years 16

  17. Other Barriers III. Impediments in Intra-SAARC Trade Lack of Border Infrastructure and Traffic Planning: Traffic congestion and delays in handling the shipments Land Ports at the Border: The storage dwell times has been increasing and the port storage is grossly inadequate. For example, at the Petrapole-Benapole border, it takes longer time to unload vehicles into the land port than the physical clearance time Lack of Cross-Border Transport Agreements: Due to lack of through-transport movement, formidable transport inefficiencies exist at the interface 17 17

  18. IV. Way Forward • Elimination of negative lists for LDCs • under a “duty free” scenario, the possible revenue loss to India would be around only USD 4.9 million (0.023 per cent of India’s custom duty and 0.004 per cent of total government revenue earnings of India) on an export of about USD 15.2 million from Bangladesh in 2008. Thus, India does not stand to lose in any significant manner if the entire sensitive list is eliminated for Bangladesh, on an immediate basis. (Rahman, 2010) • Promoting Foreign Direct Investment (FDI) • Promotion of intra-industry trade 18 18

  19. IV. Way Forward • Revisiting Rules of Origin in SAFTA • Under the SAFTA, the general RoO is 40 per cent value addition plus change in classification at the four digit level (CTH). • For LDCs, the RoO is 30 per cent value addition plus change of tariff heading (CTH). • There is a need to make these rules less cumbersome and more export-friendly. • A 25 per cent flat RoO for LDCs (as in the Canadian GSP) will make both compliance and implementation easier. 19 19

  20. IV. Way Forward • Removal of para-tariffs and surcharges for exports from SAARC countries • Trade facilitation • Effective and rapid establishments of standards and mutual recognition of standards • Removal of NTBs • Automation of customs • Strengthening the Financing of Intra-SAARC Trade • Using WTO DSB Mechanism • Cooperation for energy security • Capacity building 20 20

  21. Thank You for Your Attention 21 21 21

More Related