WTO & SPS Measures + India's New Foreign Trade Policy

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In This NEWS Bulletin *********************************** 1. WTO & SPS MEASURES - Reboot to offer safer food - Scales could tilt in favour of those who log into more advanced systems once stringent food regulations come in on RICE

- 2. India to export rice seeds to Brazil 3. Farmers to get higher yield Basmati rice variety India's FOREIGN TRADE POLICY 2007-08 ---- 4. Nath eyes $200 billion from exports in 2 years - * Service tax scrapped * Agri gets a boost * DEPB gets another year 5. Agriculture - Farm exports get a policy push; new products

included - Rural industries, particularly handloom and handicrafts and cottage get some attention 6. JWG on agri and allied sectors with Germany 7. BIS signs pact with German body for gizmo standardisation -------------------------- WTO & SPS MEASURES Reboot to offer safer food Scales could tilt in favour of those who log into more advanced systems once stringent food regulations come in http://www.financialexpress.com/fe_full_story.php?content_id=161924 ASHOK B SHARMA Posted online: Monday, April 23, 2007 at 0000 hours IST Food business is growing beyond borders. As the world debates the new quality norms being set for food industry, many third world countries are terming developed countries’ non-tariff barriers like stringent sanitary and phytosanitary (SPS) norms and quarantine measures as unfair trade practices. Advancement on tech scale will surely tilt the scales in favour of early birds when more stringent norms are set. Therefore, the role of quality standards and conformity assessment has become a focal point of discussion at the global

level. Different perceptions of different countries on these issues have created considerable frictions and often conflicts in accepting each other’s standards, testing methodologies and inspection results. Therefore, there is an imperative need to harmonise country specific food regulatory regimes. Here food technology can play an important role in not only harmonising quality norms, but also developing good manufacturing practices, including conformity to traceability norms hazard analysis at critical control points (HACCP). The area where the technology can help is the fixation of the rational maximum residue limit (MRL) for pesticides and veterinary drugs in food, which can be acceptable for implementation by member countries of Codex. Codex

has also incorporated HACCP system for identifying risk and their control. HACCP also covers pathogenic bacteria also. In HACCP system critical points are identified for control through appropriate technologies. For example, optimum temperature and heating times can kill E.coli at certain identified critical points. If the developed countries want stringent standards for implementation in global trade, they should be willing to part with their latest technologies to the food industries in the developing countries for implementation. International bodies like Codex Alimentarius Commission and International Standards Organisation (ISO) set quality norms for food; Office International des Epizooties (OIE) addresses issues relating to animal health; International Plant Protection Convention (IPPC) sets norms for plant quarantine. Though the quality norms of these global bodies are accepted as base for reference, countries are allowed to set more stringent norms. The developed countries, who are technologically advanced are in a more advantageous position to set stringent norms, which many feel, could act as non-tariff barriers in trade. In India, the contact point for Codex Alimantarius Commission is the Union health ministry, while that for OIE is the animal husbandry department and that for IPPC is the Union agriculture ministry. The Bureau of Indian Standards is the affiliate member of ISO. India has the potential to become a reliable outsourcing partner in the entire food sector given its strengths in the primary agricultural produces. The Indian food sector is estimated to be worth over $ 200 billion and is expected to grow to $ 310 billion by the year 2015, according to a study. It also contributes to a major part of the retail basket. The $ 6.1 billion Indian food retail chain is also growing at a hefty 9% and has invited foreign direct invest (FDI) to the tune of over $ 3 billion. Developing countries like India who are emerging as major players in global food trade not only need to develop their own technologies based on local conditions, lifestyles and food habit for food safety but also need to assert its relevance in the global fora. The Union health ministry has notified that from August 2007 onwards, all packaged food should carry labels stating nutritional value and trans-fat content. The ministry

is also finalising the procedures for labeling of genetically modified (GM) food. Already, there are labeling norms for distinguishing packaged vegetarian and non-vegetarian food. “These measures are necessary for giving the consumers an informed choice and to caution against any possible hazards,” says the Union health minister, Anbumani Ramadoss. OIE has played a pioneering role during the past outbreaks of Avian Flu and foot-and-mouth disease in cattle across the world. “As a result of globalisation and climate change, we are currently facing an unprecedented impact of emerging and re-emerging animal diseases and zoonoses (animal diseases transmissible to humans). Improving the governance of animal health system in both the public and private

sector is the most effective response to this alarming situation,” says the OIE director-general, Bernard Vallet. According to Vallet a fund has been set up to assist member countries in control of animal disease, promotion of animal welfare and animal production for food safety. OIE’s crucial role in helping the veterinary services meet their new challenges, through the development and use of the performance, vision and strategy (PVS) tool. ----------------------- India to export rice seeds to Brazil http://www.financialexpress.com/fe_full_story.php?content_id=161792 ASHOK B SHARMA Posted online : Saturday, April 21, 2007 at 0000 hours IST NEW DELHI, APR 20: India is all set to export rice seeds to Brazil for the first time. This has been made possible due to efforts made by officials of the Union agriculture ministry alongside Agricultural & Processed Food Products Export Development Authority (APEDA) who took up the issue with the Brazilian ministry of agriculture, livestock and food supply (MAPA). They also have successfully negotiated a plant health protocol for the purpose, according to an official press release. The next step would be issuance of a phytosanitary notification by the Brazilian agriculture ministry as per the agreed protocol, following which rice seed exports could commence. While technical discussions on the matter have been continuing for some time, the two sides agreed on the protocol for export of rice seeds from India to Brazil during the meeting of the working group on plant health issues being held at New Delhi from Apri 16 to 20, this year. The working group having been set up under the auspices of the bilateral memorandum of understanding on plant health issues

signed between the two countries signed between the two countries in September 2006 during the visit of the Prime Minister, Manmohan singh to Brazil. ------------------------ Farmers to get higher yield Basmati rice variety http://www.financialexpress.com/fe_full_story.php?content_id=161758 ASHOK B SHARMA Posted online : Saturday, April 21, 2007 at 0000 hours IST NEW DELHI, APR 20: The farmers of the traditional basmati growing areas of Haryana, Punjab, J & K, Delhi and Uttarakhand will get a new rice

variety having a higher yield (37 q/ha) than Pusa basmati 1. Pusa 1460 (IET 18990) is developed by pyramiding bacterial leaf blight (BLB) resistance genes (xa13 & Xa21) in the background of Pusa basmati 1 through marker-assisted backcross breeding. Similarly, the farmers of Andhra Pradesh, Karnataka, Orissa, Chhatisgarh and Uttar Pradesh will also get an improved variety, RP BIO 226 (IET 19046) which provides an alternative for the popular fine-grained variety Samba Mahsuri. Indian Council of Agricultural Research

(ICAR) has identified four new improved varieties and one hybrid of rice for release in different agro-climatic regions of the country. These were identified during the 42nd All India Rice Research Group meeting held recently in Hyderabad, after considering various proposals. More than 400 delegates comprising the cooperators of various ICAR centres, directors of research of state agriculture universities, representatives of private sector and non government organisations participated in the meeting. Pusa 1460 (IET 18990), a semi-dwarf type plant is suitable for irrigated-transplanted production condition. It is developed by Delhi based Indian Agricultural Research Institute under ICAR. ----------------------------- FOREIGN TRADE POLICY 2007-08 Nath eyes $200 billion from exports in 2 years * Service tax scrapped * Agri gets a boost * DEPB gets another year http://www.financialexpress.com/fe_full_story.php?content_id=161709 ASHOK B SHARMA Posted online : Friday, April 20, 2007 at 0000 hours IST NEW DELHI, APR 19: Undeterred by the rising rupee, the government on Thursday set a lofty $160-billion export target for the current fiscal, a 28% increase over last year’s $124.63 billion. India’s share in world trade is now over 1%. Unveiling the annual supplement to the foreign trade policy, commerce & industry minister Kamal Nath promised exporters what they had been long clamouring for: an exemption from the 12.36% service tax. All services rendered abroad and charged on exports from India as well as services rendered in India but utilised for exports would no longer be taxed. This will save exporters over Rs 650 crore. “If it wasn’t for the rupee, I would have set a higher target. I am confident of the resilience of exporters and that they would meet the target,” Nath said. He projected exports at $200 billion by 2008-09. The Duty

Entitlement Passbook (DEPB) scheme has been extended by a year, to March 2008. Kamal Nath placed special emphasis on the agriculture sector to boost rural employment. He expanded the scope of the Vishesh Krishi and Gram Udyog Yojana to include exports of value-added variants of several farm and forest products. To strengthen infrastructure like cold storage, he introduced a new scheme to incentivise agro-processing. Status holders will be rewarded duty credit equal to 10% of the value of agri exports, provided they use it

for duty redemption on the import of cold storage, pack houses and reefer vans. • Hi-tech goods to get 10% duty credit on incremental exports • DEPB scheme extended by a year to March 31, 2008 • Focus Product & Focus Market scheme gets Rs 1,000 cr, 50% more • Procedures made simpler, SEZ developers get more sops Noting that the tiny and cottage industry was adversely hit by the strengthening rupee, he extended the time given for completing export obligation to 12 years from eight years now under the Export Promotion Capital Goods scheme. To expand the export basket and encourage exploration of untapped markets, Kamal Nath added half-a-dozen new products to the Focus Product Scheme and 16 new countries to the Focus Market Scheme. He also announced a new scheme to provide 10% duty-free benefits on incremental exports, subject to a ceiling of Rs 15 crore for each firm to hi-tech products. The minister also hoped to cut transaction costs by simplifying procedures under different schemes. Despite the controversy surrounding tax sops to special economic zones, Kamal Nath added incentives to SEZs by allowing their developers and co-developers to benefit from duty exemption and remission schemes. ------------------------ FOREIGN TRADE POLICY 2007-08 Agriculture Farm exports get a policy push; new products included Rural industries, particularly handloom and handicrafts and cottage get some attention

http://www.financialexpress.com/fe_full_story.php?content_id=161665 ASHOK B SHARMA Posted online : Friday, April 20, 2007 at 0000 hours IST The changes in the foreign trade policy, with a view to push farm exports, have included products like coconut oil, soybean oil, potato flakes, oilmeals, flours, cardamom, food preparations including soups, sauces, pasta and bakery products, artistic wooden furniture, herbal extracts from forest produces, mait and minor forest produces for benefits under Vishesh Krishi and Gram Udyog Yojana (VKGUY). Under VKGUY, duty credit scrip benefits are granted with an aim to compensate high transport cost. Commerce and industry minister Kamal Nath said that fruits and vegetable exports had increased 40%, fresh vegetables 64%, processed juice 34% and groundnut 38%. A new scheme has also been introduced for pushing agro processing with status holders being rewarded with duty credit scrip equal to 10% of the value of agricultural exports, provided they use them for duty redemption on imports of cold storage, pack houses, reefer vans. This would be over and above the benefits available from the existing schemes of the Union ministries of agriculture and food processing industries. Ground Work • Fruits and vegetable exports had increased 40%, fresh vegetables 64%, processed juice 34% • New scheme for pushing agro processing with status holders being rewarded with duty credit scrip • The allocations for FPS & FMS have been raised by more than 50% from the existing level of Rs 650 crore Benefits under VKGUY will also be given to such export-oriented units, which do not avail direct tax benefits. The allocations for FPS & FMS has been raised by more than 50%, from the existing level of Rs 650 crore to Rs 1,000 crore. Sixteen new countries, including 10 central Asian (CIS) countries, have been included under FPS & FMS. Rural industries, particularly handloom and handicrafts, cottage and tiny industries have also

received some attention. New initiative will provide for tools, machinery and equipment for handicrafts within the present duty-free entitlement ceiling. Also, exemption from duty is being granted on machinery and equipment needed for effluent treatment plants needed for handicraft and handloom industries. The export obligation period under EPCG scheme for tiny and cottage industries is raised from 8 to 12 years. ------------------------- JWG on agri and allied sectors with Germany http://www.financialexpress.com/fe_full_story.php?content_id=161658 ASHOK B SHARMA Posted online : Friday, April 20, 2007 at 0000 hours IST NEW DELHI, APR 19: India and Germany have decided to set up a joint working group for cooperation in agriculture and allied sectors. The working group will meet twice a year. The proposal was finalised at a discussion between agriculture minister Sharad Pawar and the visiting German parliamentary state secretary in the ministry of food, agriculture and consumer protection Gerd Muller. Pawar suggested that areas like agro-processing, farm research and animal breeding have vast potential for bilateral cooperation. A number of reforms have been initiated in the agri-marketing to rope in more corporate investment. He said India was looking forward to more proposals for cooperation in the agri-business. The different food standards

were hampering the entry of Indian agriculture products into Europe and Germany, he said. Earlier agriculture secretary PK Misra at the delegation level discussions said that tremendous emphasis is being laid on increasing investment in rural infrastructure and improving productivity in agriculture. Other key areas include diversification of high value crops, strengthening post-harvest infrastructure, linking agriculture to markets and agro-products. Specific areas discussed relate to cooperation in the field of agriculture research, food processing, animal husbandry, development of plant varieties, seeds and planting material, farm machinery and marketing of agricultural products ------------------------ BIS signs pact with German body for gizmo standardisation http://www.financialexpress.com/fe_full_story.php?content_id=160004 ASHOK B SHARMA Posted online : Wednesday, April 04, 2007 at 0000 hours IST NEW DELHI, APR 3: The country’s body for setting quality norms and standards, Bureau of Indian Standards (BIS) has signed an agreement for cooperation with the German body for setting stands on electrical, electronic and information technology equipment. A memorandum of understanding (MoU) to this effect was signed on Tuesday here in Delhi by the BIS director-general, Alka Soni and the visiting managing director of DKE German Commission for Electrical, Electronic & Information Technologies of DIN and VDE, Heinrich Zimmermann. This agreement is designed to promote interests of the two countries through mutual cooperation in electrotechnical standardization on the basis of equality. The MoU said that the agreement is “in consideration of the importance of standardization for development of good trade relations between India and Germany in the spirit of the WTO ‘s

agreement on technical barriers to trade.” Both parties agreed that this agreement would strengthen their participation in the International Electrotechnical Commission (IEC). They agreed that any dispute relating to the interpretation of the MoU will be settled amicably by mutual considerations and negotiations at various levels. Exchange of information and visits of experts are also envisaged in the MoU. The MoU will be for 5 years and would be renewed automatically for another 5 years, if the parties do not object. The

MoU does not limit the right of either party to enter into cooperation with any third party on the issue of electrotechnical standardisation. -----------------------

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