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U.S. Plan for Industrial Tariff Removal Met With Early Negative Response

GENEVA — Influential developing countries?led by India and Pakistan have given a preliminary thumbs-down response in global trade talks to the ambitious U.S. offer to scrap all industrial tariffs by 2015, on the grounds the proposal is...

GENEVA — Influential developing countries?led by India and Pakistan have given a preliminary thumbs-down response in global trade talks to the ambitious U.S. offer to scrap all industrial tariffs by 2015, on the grounds the proposal is unrealistic.

Major trading powers such as the European Union and Japan, who have put forward less ambitious industrial tariff initiatives, also questioned?the timing and?lack of flexibility of the U.S. initiative, while close allies Australia, New Zealand and Singapore, lauded it.

K.M. Chnadrasekhar, India’s ambassador to the World Trade Organization, told delegates the Bush administration’s initiative was “clearly unfair,?as it fails to take into account the development and fiscal needs of poor nations,” and stressed that customs revenues still account for about 30 to 40 percent of Indian government receipts.

The?potential revenue shortfall was also flagged by Pakistan and many other developing nations.

Linnet F. Deily, Deputy U.S. Trade Representative, however, told reporters the administration is not indifferent to the concerns of poorer WTO members.

“We are mindful of the concerns expressed about the need to maintain revenues,” Deily said, and added the U.S. proposal indicates, “We are prepared to talk further about how special and differential treatment can be tailored to meet individual members’ needs, particularly those of least developed countries.”

The India envoy said lowering duties to zero would mean less funds for development and social services.

Pakistan said many poor WTO members will not be able to go along with the zero initiative.

Hervé Jouanjean, the EU chief market access negotiator, told reporters that the 15 member country grouping is ready to go to zero tariffs in areas such as textiles, clothing and footwear, but added, “Others must go to zero as well. If they can’t, forget about it.”

Jouanjean said, “what matters to us is access to markets.”

The EU envoy complained the levels of protection varied widely between developing countries?and argued this should be corrected.

Brazil and Argentina had substantially higher tariffs than China, he noted.