To push agricultural negotiations forward at the World Trade Organisation, India will try to build a consensus at the G-20 meeting in New Delhi next month to press developed countries like the US and the European Union to convert their agricultural tariffs from specific to ad-valorem and bring them in line with a particular ceiling.
"Developed countries have not started the exercise to convert specific duties to ad-valorem since they have not been able to agree over which formula to use to convert the duties. We will try to build a consensus on allowing developed countries to use any formula to convert duties. However, there will be ceiling based on an average ad-valorem tariff level of developing countries and developed countries will have to bring their ad-valorem tariffs in line with this ceiling before tariffs cut can be discussed," a senior government official told Business Standard.
The G-20 member countries will try to build a consensus on a 'declaration' in New Delhi to push for tariff negotiations in agriculture and reduction in export subsidies and domestic support by the developed countries.
Ad-valorem duty is expressed as a percentage of the value of the imported item while the non ad-valorem duty can be fixed as a specific duty levied per unit of currency, or compound duties, or mixed duties which is a mix of ad-valorem and specific or as 'other' fomulations including technical factors such as percentage of agricultural component such as sugar, alcohol, milk etc.
India has only two items pertaining to almonds, which are under specific rates. Countries like the US have 42.5 per cent of their tariff lines under non ad-valorem while the EC has nearly 46 per cent of their tariff lines under non ad-valorem.
As per the Consolidated Tariff Schedules Database, nearly 7,977 agricultural tariff lines that are bound in non ad-valorem terms by a total of 34 members, counting the European commission and Switzerland-Liechtenstein as one. These tariff lines account for over 20 per cent of all the final bound agricultural tariff lines.
Officials said conversion of tariffs to ad-valorem was the first step in pushing for tariff reduction.
"Irrespective of what formula is used by the developing countries, the ad-valorem rates of both developing and developed will have to converge. There cannot be a huge difference. Since the average ad-valorem tariffs of developing countries is low, the developed countries will have to bring their ad-valorem rates in line," an official said.
The G-20 meeting, on March 19, is expected to be attended by representatives from Brazil, China, South Africa and Gautemala. The meeting in India will be preceded by a senior officers level meeting at the WTO headquarters in Geneva on March 14, officials added.
