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Since 1st March, 1999
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Lamy stands by promise on textiles

New Delhi, March 13: European Union trade commissioner Pascal Lamy said today the EU will stand by its commitment to phase out textiles quotas by the end of 2004 and is ready to be more flexible on the issue of manpower exports.

Lamy, who met commerce minister Arun Jaitley and Indian business leaders at a Ficci conference, also promised greater market access to agricultural and non-agricultural goods.

“We are fully committed to doing away with all quotas for textiles by the end of December 2004,” Lamy told reporters after his meeting with Jaitley.

The EU's assurance comes at a time when several countries are trying to push back the deadline. The US has also promised to support the phase-out of all textile quotas by 2004.

Lamy said: “The EU obviously has to further open its markets in agriculture, address the issues of peak industrial tariff and tariff escalation. We will do so in return for increased openness from developed countries, but also from developing countries, where they are able to do so.”

However, serious differences are reported to have arisen during his meeting with Jaitley over the European Union's decision to grant special tariff concessions to Pakistan under the generalised system of preferences (GSP).

While India maintained that this had adversely affected Indian textiles exports to the EU, Lamy stuck to the stand that this was not the case. Both sides furnished figures to support their respective stands. Statistics reveal that approximately 28 per cent of India’s total textiles exports are to the European Union. However, in the last 5-6 years, the volume of exports has stagnated at $ 3 billion. A bulk of these exports come from labour-intensive small-scale units.

The European Union said it is working towards building a new tariff regime on rice. Lamy, however, assured that the structure of the new regime would not affect the preferential treatment being meted out to basmati.

“It is true that we have a discriminatory rice regime, but then we also give preferential access to basmati under the present system,” said Lamy while addressing the ‘India-EU partnership on WTO issues: Cancun and beyond’ organised by the Federation of Indian Chamber of Commerce and Industry.

He added that lower prices would result in greater market access for countries exporting rice to EU. “I have had discussions with agriculture commissioner Franz Fischler to ensure that the concession for basmati is retained,” said Lamy.

At present, the EU gives a concession of 250 euros a tonne on brown rice imports. This has significantly increased India's exports to EU by 1.5 lakh tonnes in the last few years. India is now demanding a similar concession for the export of white rice.

Speaking on the issue of steel imports by the EU, Lamy said, “The EU does not propose to have any such protection mechanism to prevent steel imports. But if US protection (of its steel market) results in the surge of imports into EU, only then will we impose protection tariffs. It will then be a supplementary tariff and not like the US import tariff.”

At present, the EU does not permit imports of Indian whisky. This is because of a semantic difference. “We define alcohol made from molasses (which is what most Indian whiskys are made out of) as rum and not whisky. We have some protection for rum category, let us see what can be done on this front.”

Speaking on the issue of phasing out of import restrictions, Lamy said the list of items restricted for imports were shrinking and both India and the EU were jointly working towards it.

Under the GSP tariff concession, the EU allows duty-free import of garments from Pakistan. India has claimed that it suffered an estimated loss of $ 300 million a year because of this tariff bias. EU has been extending this facility on the ground that Pakistan had successfully fought drug trafficking.

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