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

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The ABC further noted that the success <strong>of</strong> current <strong>and</strong> future marketing efforts in <strong>India</strong> will be influenced by factors that are not uncommon in any developing market, such as mature infrastructure, distribution systems, <strong>and</strong> importers’ access to capital (for financing). Finally, in its written statement, the ABC cited several concerns that it views will impact future sales to <strong>India</strong>: (1) <strong>India</strong>’s bureaucratic system <strong>and</strong> nontransparent nature <strong>of</strong> regulatory development; (2) <strong>India</strong>’s development <strong>of</strong> st<strong>and</strong>ards (for pesticide residues, commodity st<strong>and</strong>ards, <strong>and</strong> food safety regulations) independent <strong>of</strong> globally recognized st<strong>and</strong>ards; <strong>and</strong> (3) a potential free trade agreement between <strong>India</strong> <strong>and</strong> Australia, <strong>India</strong>’s second-largest import supplier <strong>of</strong> almonds. Biotechnology Industry Organization 3 In its written submission, the Biotechnology Industry Organization (BIO) stated that it represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers, <strong>and</strong> related organizations in the United States <strong>and</strong> 31 other nations. BIO asserted that <strong>India</strong>’s lack <strong>of</strong> tolerance for the low-level presence <strong>of</strong> genetically engineered commodities that might be inadvertently present in shipments <strong>of</strong> grain from the United States acted as a significant trade barrier. BIO requested that the United States prioritize the issue in bilateral discussions with <strong>India</strong>. BIO stated that it is opposed to a policy under consideration in <strong>India</strong> that would require the labeling <strong>of</strong> all products derived from agricultural biotechnology. Instead, BIO expressed its support for science-based regulations that would require labeling only when the product has been significantly changed nutritionally or in health-related characteristics. Finally, BIO identified several intellectual property issues <strong>of</strong> concern in <strong>India</strong>, including the alleged use <strong>of</strong> compulsory licenses that go beyond the letter <strong>and</strong> spirit <strong>of</strong> the Doha Declaration, exceptions for transgenic plants <strong>and</strong> animals in the patent laws, the requirement that the source <strong>and</strong> geographical origins <strong>of</strong> biological material used in an invention be disclosed in patent applications, <strong>and</strong> the lack <strong>of</strong> meaningful protection for test data submitted to support the regulatory approval <strong>of</strong> pharmaceuticals <strong>and</strong> agricultural chemicals. Blue Diamond Growers 4 In its written statement <strong>and</strong> its direct hearing testimony, Blue Diamond Growers described itself as a nonpr<strong>of</strong>it, farmer-owned grower cooperative <strong>and</strong> the largest processor <strong>and</strong> marketer <strong>of</strong> almonds in the world. In its written statement, the cooperative detailed the history <strong>of</strong> cooperation among Blue Diamond Growers, the U.S. government, <strong>and</strong> the <strong>India</strong>n government in successfully opening <strong>and</strong> maintaining market access for U.S. almonds in <strong>India</strong>, dating back to the early 1980s. According to Blue Diamond Growers, through its efforts the <strong>India</strong>n government first allowed U.S. almond imports into the country in 1981 at tariff rates <strong>of</strong> 120–190 percent. Over time, that rate fluctuated, <strong>and</strong> today U.S. almonds are subject to 18–20 percent ad valorem equivalent tariffs. As the pioneer in bringing U.S. almonds to <strong>India</strong>, Blue Diamond Growers stated that it has been active in product promotion in <strong>India</strong> <strong>and</strong> created a mass market for almonds through 3 Biotechnology Industry Association, written submission to the USITC, June 26, 2009. 4 USITC, Hearing transcript, April 21, 2009, 20–24 (testimony <strong>of</strong> Julian Heron, Blue Diamond Growers); Blue Diamond Growers, written submission to the USITC, March 24, 2009. D-4
advertising <strong>and</strong> promotional programs held throughout <strong>India</strong>. Accordingly, dem<strong>and</strong> in <strong>India</strong> for U.S. almonds has grown, as demonstrated by the growth in U.S. exports there, rising from approximately 3,000 mt in 1989 to just more than 38,000 mt in 2008. California Cling Peach Board 5 In its written submission, the California Cling Peach Board, a nonpr<strong>of</strong>it, quasigovernmental association representing approximately 600 cling peach growers in California, stated that the U.S. cling peach industry is interested in exporting canned peaches <strong>and</strong> canned fruit mixtures, the industry’s principle products, to <strong>India</strong> but the high tariffs, additional import fees, <strong>and</strong> the lack <strong>of</strong> a developed market for canned fruit have prevented U.S. exports. In addition, another industry concern noted in the submission is the large disparity between lower <strong>India</strong>n applied <strong>and</strong> high bound rates, which allows <strong>India</strong> to adjust their tariff rates legally but by large amounts. As a result, high <strong>India</strong>n bound rates may limit the impact <strong>of</strong> future World Trade Organization (WTO) Doha negotiations on <strong>India</strong>n applied rates. California Pistachio Export Council 6 In his direct testimony, Mr. Zion stated that the California Pistachio Export Council (CPEC) h<strong>and</strong>les 40 percent <strong>of</strong> U.S. pistachio exports <strong>and</strong> represents six <strong>of</strong> the seven major processors in California. He noted the strong <strong>and</strong> growing dem<strong>and</strong> for pistachios in <strong>India</strong> because <strong>of</strong> their historical presence in <strong>India</strong> due to pistachios imported from Afghanistan <strong>and</strong> Iran. Dem<strong>and</strong> for pistachios has also grown along with the increase in <strong>India</strong>’s middle class population, education levels, <strong>and</strong> increased desire to enjoy healthier snack foods. Mr. Zion noted that the CPEC does not consider that <strong>India</strong>n laws <strong>and</strong> regulations for imports <strong>and</strong> domestic procedures constitute nontariff measures but that the 30 percent tariff on pistachio imports in <strong>India</strong> is a large burden for U.S. exporters. Until the tariff is lowered, Mr. Zion asserted, U.S. pistachio exports to <strong>India</strong> will never reach their full potential. He further added that the reduction <strong>of</strong> the tariff would benefit <strong>India</strong>ns by increasing government revenues, employment in pistachio processing facilities through increases in foreign direct investment, <strong>and</strong> availability <strong>of</strong> the nuts at lower prices. In response to questions from Commissioner Williamson, in his posthearing brief Mr. Zion provided estimates <strong>of</strong> the domestic economic benefits for exp<strong>and</strong>ed pistachio trade to <strong>India</strong>. He cited a research finding that, for every $1 billion in agricultural exports from California, 27,000 jobs are created. He cited additional estimates that, for every dollar <strong>of</strong> exports, about $1.70 in economic activity is generated. Using these statistics, Mr. Zion indicated that, with a 50 percent increase in U.S. pistachio exports to the <strong>India</strong>n market over the next three years, 90 new jobs would be created <strong>and</strong> an additional $5.6 million in economic activity would be generated. Mr. Zion stated that his organization believes that <strong>India</strong> has the potential to be a $100 million market for U.S. pistachios, which would equate to 2,500 new jobs <strong>and</strong> an additional $160 million in economic activity. 5 California Cling Peach Board, written submission to the USITC, May 26, 2009. 6 USITC, Hearing transcript, April 21, 2009, 34–38 (testimony <strong>of</strong> Jim Zion, California Pistachio Export Council); Zion, Posthearing brief to the USITC, April 28, 2009. D-5
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United States International Trade C
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U.S. International Trade Commission
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Abstract This report describes <str
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TABLE ES.1 India:
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U.S. agricultural products face str
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U.S. Foreign Direct Investment U.S.
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CONTENTS Page Abstract ............
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CONTENTS―Continued Chapter 6 <str
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CONTENTS―Continued Figures 1.1. <
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ACRONYMS AND TERMS AAY Antodaya Ann
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ACRONYMS AND TERMS—Continued RGGV
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TABLE 1.1 India: A
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FIGURE 1.1 India:
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India’s central
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Despite their weak economic pr<stro
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Approach Current India</str
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Bibliography Birner, Regina, Surupt
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World Bank. Agriculture for Develop
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FIGURE 2.1 India:
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TABLE 2.1 India: A
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FIGURE 2.3 India:
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premium); (2) India</strong
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include government export restricti
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TABLE 2.3 India: A
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FIGURE 2.6 India:
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Exports by Major Trading Partner <s
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CHAPTER 3 Domestic Consumption Over
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TABLE 3.2 India: P
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more likely to have been exposed to
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BOX 3.3 Indian Con
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TABLE 3.3 India: T
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are expected to see income growth <
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Food Preferences India</str
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Regional Variation Geographic <stro
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CCC. “Know India
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CHAPTER 4 Indian A
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For most crops, however, In
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The Farm Sector soybeans 29 —but
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Food processing in India</s
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BOX 4.1 The Central Government’s
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BOX 4.2 Does the Minimum Support Pr
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August 3, 2009, New Delhi announced
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known as zamindars, have doubled or
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that the PFA Act was strictly enfor
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———. Bharat Nirman: A Time-Bo
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Organisation for Economic Co-operat
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CHAPTER 5 TARIFFS Overview
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sensitive. They include vegetable f
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wholly milled rice and</str
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The Indian governm
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India also reporte
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Reference Prices Reference prices,
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Landing Fees <stro
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Simulated Effects
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and nuts” by $0.
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5-19 TABLE 5.4 India</stron
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Bibliography Acharya, Keya. “Thor
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Indian Express.com
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CHAPTER 6 Nontariff</strong
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foreign sources. 6 For example, SPS
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BOX 6.1 Milk and M
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BOX 6.2 Wheat—Continued Yet, <str
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perpetuated continuously. The impor
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notices that must be integrated wit
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import corn under the TRQ is too bu
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Customs Procedures India</s
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Corruption Interests within <strong
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TABLE 6.2 India: E
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Bibliography American Apparel <stro
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Mattson, Jeremy W., Won, W. Koo, <s
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———. 2009 National Trade Esti
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TABLE 7.1 India: C
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First Point of Sal
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Private mandis Som
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approximately 65 million households
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7-10 TABLE 7.2 India</stron
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poor communications infrastructure
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limited popularity with farmers bec
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The lack of infras
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found that 39 percent of</s
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Bibliography Banerjee, A. Dairying
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Tiwari, Shri Rajendra Kumar. “Pos
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Page 174 and 175: Food Processing and</strong
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Page 178 and 179: For processing of
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Page 182 and 183: Under certain circumstances, FDI ca
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Page 186 and 187: Bibliography Bahn, Niti, an
Page 188 and 189: International Center for Alcohol Po
Page 190 and 191: Structure of the <
Page 192 and 193: BOX 9.1 The UPOV System for Plant V
Page 194 and 195: that the public sector in I
Page 196 and 197: Whether this situation will soon ch
Page 198 and 199: The U.S.-India Bus
Page 200 and 201: eggplant, which began field trials
Page 202 and 203: Maskus, Keith E. “Intellectual Pr
Page 205: APPENDIX A REQUEST LETTER
Page 208 and 209: The Honorable Sham L. Arano
Page 211 and 212: cprice-sewell on PRODPC61 with NOTI
Page 213: APPENDIX C HEARING WITNESSES
Page 216 and 217: ORGANIZATION AND WITNESS: Tuttle Ta
Page 219: Summary of Views <
Page 223 and 224: highest in the Asia-Pacific region.
Page 225 and 226: to U.S. exports to India</s
Page 227 and 228: transparent sanitary regulations th
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Page 231 and 232: Western Pistachio Association 26 In
Page 233: APPENDIX E POTENTIAL FOR U.S. AGRIC
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Page 250 and 251: is in nonirrigated areas with yield
Page 252 and 253: Consumption India
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Bibliography Chaulan, Shri U.K. “
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Simulation Framework The effects <s
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Producers determine the optimal sup
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Applied ad valorem tariff equivalen
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We considered the possibility that
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Estimation of <str
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Bibliography Anderson, Kym, Mariann
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