Pakistan-India Trade:

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Additional Trade Challenges: Transport, Transit, and Non-Tariff Barriers Table 4: route-Wise Comparison of Transaction Cost (TC) facilitating measures have been taken and the situation on the ground may well have changed. Nonetheless, the above study provides a useful benchmark against which fresh estimates can be prepared and compared. non-Tariff Barriers distance (Km) Pakistan has been extremely concerned about non-tariff barriers that it faces in accessing the Indian market. Pakistan has identified several nontariff measures (under the sub-group on non-tariff barriers set up under SAFTA) which it deems trade restrictive. In fact, the imposition of Non- Tariff Measures (NTMs) is legitimately allowed under various provisions of the World Trade Organization (WTO) to ensure safety and to protect plant, animal, and human life provided they meet the principle of MFN treatment and the principle of national treatment. The latter principle prohibits discrimination between domestic and foreign goods in the application of these measures. The provisions under the WTO’s Agreement on Technical Barriers to Trade (TBT) permit members to apply measures largely to manufactured products provided they are not trade restrictive. | 91 | Total TC Cost $ per Container Transaction Cost $/ Container/ Km land Delhi-Attari (road-cum-rail) Delhi-Mumbai-Karachi (rail- 479 415 0.87 cum-sea) 2274 1058 0.47 sea Mumbai-Karachi 885 576 0.65 Mumbai-Dubai-Karachi 3127 776–976 0.25–0.31 Source: Taneja (2006). Note: Estimates for transport and other transaction costs were obtained for a 20-foot sea container. Load costs for land transport were obtained for the same quantity.
Nisha Taneja Similarly, members are allowed to apply Sanitary and Phytosanitary (SPS) Measures only to the extent necessary, and based on sufficient scientific evidence. These measures, when applied in a trade-restrictive manner, obstruct trade and pose non-tariff barriers. Thus, complex procedures and a lack of transparency in regulations are some examples of measures that could be trade-restrictive. An analysis of the non-tariff measures notified by Pakistan under SAFTA shows that some of them did not pose any barrier because they were compliant with WTO rules, or because corrective action had already been undertaken (Taneja, Rastogi, and Rai 2008). Other measures were found to be trade-restrictive on account of non-recognition of standards, lack of transparency of rules and regulations, lack of infrastructure, and complex and cumbersome procedures. The measures perceived as being discriminatory were related to various levies and taxes imposed by India on the interstate movement of goods. Although these measures restrict trade by inflicting additional transaction costs, they do not qualify as non-tariff barriers. This is because similar treatment is accorded to interstate movement of domestic goods. Necessary corrective action is being taken as part of the ongoing reform process in India. There were other notified NTMs where India had already initiated corrective action, but SAFTA member countries (such as Pakistan) are unaware about many of these actions. For instance, Pakistan notified that a labeling requirement under the Jute and Jute Textiles Control Order of 2000, which stipulated that each and every imported jute bag must give the “Country of Origin” on the bag, discouraged imports as bags carrying such labeling could not be used for packing goods made in India. The marking requirement was amended in 2002, directing every jute bag to be marked/printed/branded “Bag made in—Country of Origin.” However, despite this amendment, Pakistan had notified that the Control Order of 2000 was a barrier for Pakistani exporters. A similar problem was found in a measure related to clauses in the Indian Customs Act pertaining to valuation not consistent with GATT Article VII (which lays down the general principles for an international system of valuation). The required amendments in the Customs Act were made in 2007, yet this NTM was notified under the SAFTA subgroup on NTMs. This indicates a lack of awareness about the amended Indian Customs Act. | 92 |
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