India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

CHAPTER 6
<strong>Nontariff</strong> <strong>Measures</strong>
Overview
U.S. agricultural exports to <strong>India</strong> face a wide array <strong>of</strong> nontariff measures (NTMs), whose
application either raises the cost <strong>of</strong> exporting U.S. agricultural products to <strong>India</strong>n
consumers or bars those exports completely. 1 As international agreements have resulted
in the general lowering <strong>of</strong> agricultural tariff rates worldwide, the prominence <strong>of</strong> NTMs in
certain countries as the next “line <strong>of</strong> defense” has increased. 2 Unlike tariffs, which are
normally applied equally to all trading partners, NTMs can affect agricultural imports
from some countries disproportionately. 3 Furthermore, certain NTMs have no practical
effect when other NTMs are more trade restricting; U.S. exporters <strong>of</strong> agricultural
products are well aware that resolving one NTM may only make others more prominent. 4
<strong>India</strong>n NTMs identified as hindering U.S. agricultural exports include quality st<strong>and</strong>ards
on certain processed foods, fumigation requirements for pulses, <strong>and</strong> government
monitoring <strong>of</strong> import volumes <strong>of</strong> fruits <strong>and</strong> nuts, cotton, <strong>and</strong> alcoholic beverages. <strong>India</strong>n
NTMs reported to effectively block U.S. agricultural exports include unattainable
st<strong>and</strong>ards for purity in wheat exports; non–science-based health st<strong>and</strong>ards for poultry,
swine, <strong>and</strong> dairy exports; <strong>and</strong> effective bans on most U.S. products containing genetically
modified organisms (GMOs). More broadly, all U.S. exports are affected by certain types
<strong>of</strong> systemic <strong>and</strong> nontransparent <strong>India</strong>n NTMs, such as inefficient regulatory notice <strong>and</strong>
comment procedures, corruption at the ports <strong>of</strong> entry, <strong>and</strong> burdensome or irregular
customs procedures.
Identifying trade conditions that are covered by rules or guidelines in World Trade
Organization (WTO) agreements as NTMs can be difficult, <strong>and</strong> negotiating to lower or
remove the measures can be time consuming. 5 Certain NTMs facing U.S. agricultural
1 Mattson, Koo, <strong>and</strong> Taylor, “Non-Tariff Trade Barriers in Agriculture,” March 2004, 1. The World
Trade Organization (WTO), the World Bank, <strong>and</strong> the United Nations Conference on Trade <strong>and</strong> Development
(UNCTAD) hosted a recent trade conference during which NTMs were defined using a fairly common
construction: “government measures other than ordinary tariffs that can potentially have an economic effect
on international trade in goods, changing quantities traded, or prices or both.” WTO Secretariat, “Data Day at
the WTO: Trade <strong>and</strong> Market Access Data for Policy Makers,” May 18–19, 2009, 25. See also Nicita, “Non
Tariff <strong>Measures</strong>,” May 18, 2009. The conference definition distinguished nontariff barriers as NTMs having
a “protectionist intent.” As the <strong>India</strong>n government <strong>and</strong> U.S. exporters <strong>of</strong> agricultural products to <strong>India</strong> differ
on the intent or purpose <strong>of</strong> <strong>India</strong>n NTMs, this chapter will focus on NTMs identified as already having had an
economic effect on existing or potential U.S. agricultural exports to <strong>India</strong>.
2 For example, in discussing U.S. exports <strong>of</strong> processed foods, one industry group states that although
<strong>India</strong>n tariffs have been reduced <strong>and</strong> <strong>India</strong>n barriers to investment have decreased, regulatory barriers that
effectively bar U.S. exports have simultaneously increased. Industry representative, telephone interview with
Commission staff, May 8, 2009.
3 A number <strong>of</strong> the <strong>India</strong>n NTMs examined here affect all imports, although sometimes to varying degrees.
This chapter will focus on the effect <strong>of</strong> <strong>India</strong>n NTMs specifically on U.S. agricultural exports.
4 For example, imports <strong>of</strong> U.S. processed agricultural goods containing genetically modified organisms
(GMOs) would be hindered by <strong>India</strong>n labeling regulations that differ from internationally accepted norms.
Such goods are already effectively banned from the <strong>India</strong>n market, however, by rules on the importation <strong>of</strong>
products containing GMOs, thus rendering labeling regulations presently irrelevant as an NTM.
5 Kulkarni, “Non-Tariff Barriers <strong>and</strong> NAMA Negotiations,” September 2005, 1–4; Kumar, Mukherjee,
<strong>and</strong> Simi, “Negotiations on <strong>Nontariff</strong> Barriers Under NAMA,” 2007.
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