Global Economy

India, China seek simpler farm tariff norms


NEW DELHI: India and China have asked developed countries, including European Union nations and the United States, to simplify their tariff structures for agricultural goods and adopt a more transparent, value-based levy.

Most developing countries including India use ad-valorem duties or tariffs expressed as a fixed percentage of the value of the imported product. Developed countries, however, impose specific duties — on each unit of specified quantity of an imported item, like dollars per tonne.

The United States, for instance, had 820 distinct duties for agricultural goods in 2018, Japan 352 and Canada had 473 such bound tariffs compared to India’s 19 and China’s 40.

Bound tariffs are the ceiling rates beyond which countries cannot raise duties. “Simplification of tariffs is something that we have consistently been demanding as part of the agriculture negotiations,” an official in the know of the development said.

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Easy-Duty

India raised the subject at a recent meeting on agriculture issues at the World Trade Organization (WTO).

Besides being difficult to calculate average tariffs from specific duties, such duties also hide the actual levels of protection.

The EU imposes tariffs based on seasons to protect its domestic fruit and vegetable producers during the growing season. It also has differentiated tariffs for temperate and semi-tropical fruits.

“A specific duty may look less, but actually can turn out to be quite high,” said another official.

India’s present import duty rates for apples is 50%, which is also the bound rate of duty. For the EU, this tariff is based on the minimum entry price per 100 kilograms. Similar complex duties are also levied on fresh apricots, pears, cherries, peaches, and frozen fruit and nuts, among others.

In 2018, the bound non ad-valorem duties were as high as 41.3% in the US, while India’s was 0.3% for agricultural goods.





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