NEWS Bulletin from Indian Society For Sustainable Agriculture And Rural Development
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1. UNDP wants climate justice through trade
2. Cut tariffs on palm oils before CECA deal : Malaysia - India-ASEAN FTA within two months, says Nath
http://www.financialexpress
ASHOK B SHARMA
Posted online: Tuesday , November 27, 2007 at 2101 hrs IST
The UN Development Programme (UNDP) for the first time in its human development report has analysed the impact of climate change. The Human Development Report 2007-08 – Fighting climate change : Human solidarity in a divided world is released at a time when the climate change agenda is slowly gaining its entry in the WTO negotiations and the discussions on the review of the work under Kyoto Protocol is slated to take place in Bali in Indonesia in December, this year.
The report documented the impact of climate change across the world also projected the likely scenario for the future. Making out a case for alternative sources of energy and fuels like bio-fuels, the UNDP report said that global trade has a major role to play. It said : "International trade could play a much larger role in the expanding Markets for alternative fuels. Brazil is more efficient than either the European Union or the United States in producing ethanol, Moreover, sugar-based ethanol is more efficient in cutting carbon emissions. The problem is that imports of Brazilian ethanol are restricted by high import tariffs. Removing these tariffs would generate gains not just for Brazil, but for climate change mitigation."
However, the report brought to the light, the concerns of deforestation for growing oil crops. It said : "In Indonesia, every $ one generated, through deforestation to grow palm oil (oil palm crop) would translate into a $ 50-100 loss if the reduced carbon capacity could be traded on the European Union's Emissions Trading Scheme (ETS). Beyond these market failures, the loss of rainforests represents the erosion of a resource that plays a vital role in the lives of the poor, in the provision of the ecosystem services and in sustaining biodiversity." It advocated the potential of carbon Markets in the creation of incentives to avoid deforestation.
Again dealing with the trade angle, the report said that the rising prices for oil and natural gas was one of the reason why coal figured prominently in the present planned energy mix of major emitters like China, India and US. In this context, it advocated the carbon capture and storage (CCS) technology which "holds out the promise of coal-fired power generation with near-zero emissions."
The report noted that commitments under the Kyoto Protocol are slated to expire in 2012. It said that global mitigation efforts would be dramatically enhanced if a post-2012 Kyoto framework incorporates mechanisms for finance and technology transfers.
Energy related carbon dioxide emissions have increased sharply since 1990, the reference years for reductions agreed under the Kyoto Protocol, it said and added that not all developed countries ratified the Protocol's targets, which would have reduced their average emissions by around 5%.
"Most of those that did are off track for achieving their commitments," it said.
The UNDP report noted that Kyoto Protocol did not place any quantitative restrictions on emissions from developing countries. "If the next 15 years of emissions follows the linear trend of the past 15 years, dangerous climate change will be unavoidable," it said.
"Negotiations on emissions limits for the post-2012 Kyoto Protocol commitment period can – and must – frame the global carbon budget." Saying so it noted most developed countries like Canada fell short of the targets. Though the European Union and UK have both embraced their targets, they are likely to fall far short of the goals set unless they move rapidly to put climate mitigation at the center of energy policy reform. Two major OECD countries like US and Australia are not bound by Kyoto Protocol.
The report suggested two ways to mitigate climate change, one is to directly tax carbon dioxide emission and the other is cap-and-trade. Under cap-and-trade system, the government sets an overall emissions cap and issues tradable allowances that grant business the right to emit a set amount. Those who can reduce emissions more cheaply are able to sell allowances. One potential disadvantage of cap-and-trade is energy price instability while the potential advantage is environmental certainty, it noted.
While the transition to climate protecting energy and life styles will have short-term costs, there may be economic benefits beyond what what is to be achieved by stabilizing temperatures. These benefits are likely to be realized through Keynesian and Schumpeterian mechanisms with new incentives for massive investment stimulating overall demand and creative destruction leading to innovation and productivity jumps in a wide array of sectors, the foreward to the report said.
"While government leadership is going to be essential in correcting the huge externality that is climate change, Markets and prices will have to be put to work so that private sector decisions can lead more naturally to optimal investment and production decisions," it said.
The report contains wise sayings of Mahatma Gandhi who once reflected on how many planets might be needed if India were to follow Britain's pattern of industrialization. It also contains words of the Brazilian environmentalist, Chio Mendes. However the report failed to define the responsibilities of climate mitigation by countries by basing on the per capita consumption of carbon dioxide.
The report also advocated adaptation as a process, which amounts to opening up for a technology bazaar with tags of IPR regime.
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ASHOK B SHARMA
Posted online: Monday , November 26, 2007 at 2025 hrs IST
Ahead of the discussion on India-Malaysia Comprehensive Economic Cooperation, Malaysia has demanded that India should reduce its applied tariff on palm oil.
"At present the applied tariff on palm oil in India is high. This is the product of our export interest. India needs to lower its applied tariff on palm oil," said the visiting Malaysian minister of international trade and industry, Dato' Seri Rafidah Aziz said on Monday.
Malaysia exports about $ 7 billion palm oil annually. Its exports of palm oil to India in 2006 amounted to $ 245.35 million as against $ 274.35 million in 2005.
With a view to deal with the price situation in the country India had reduced its effective duty on crude palm oil to 40% that on refined palm oil to 50% and that on RBD palmolein to 54.08%.
On August 11, this year the two countries completed the joint feasibility study for a comprehensive economic cooperation agreement (CECA) which proposes to Malaysia's export by 1.3 times to $ 11.85 billion and India's export by 2.5 times to $ 4.63 billion by 2012.
In 2006 Malaysia's exports grew by 29.52% to be at $5,120.55 million, while its imports from India grew by 21.11% to be at $1,331.51 million. In 2007 till August, Malaysia's exports to India was $1,691.08 million while its imports from India was $1, 178.46 million.
The Indian commerce minister, Kamal Nath, however said : "The tariff structure on palm oil needs to be carefully worked out for the CECA. We do not want to imperil our oilseed growers." He said that the free trade agreement (FTA) with ASEAN would also be worked out within a couple of months.
Aziz is leading a 91-member official and business delegation to India and is slated to visit Mumbai and Chennai also.
Malaysia's major exports to India also include crude petroleum, E&E products, chemical products. It major imports from India includes chemical products, metal products, live animal and meat, E&E products and iron and steel products.
In the context of India's proposal for signing a FTA with ASEAN, Aziz said : "Malaysia is a strategic gateway to the ASEAN free trade area of more than 567 million people and is a highly competitive regional manufacturing hub and a service and distribution centre."
The Malaysian minister invited Indian Companies to invest in her country. She said that Indian Companies can look forward for investing in manufacturing and related sectors like medical device industry like cathethers, rubber gloves, syringes, needles, surgical instruments, blood transfusion sets, medical tubes and bags, diagnostic radiographic equipment, orthopaedic products, procedural kits and in pharmaceutical sector like biogenerics, diagnostics, vaccines, innovator drugs, active pharmaceutical ingredients, vaccines, inhalation products, novel delivery systems.
Aziz also appealed to the Indian industry to invest in service sector like construction industry, healthcare and biotechnology in food and agriculture, biopharmaceuticals and biodiagnostics.
She said that the joint CECA study has has recommended intra-industry trade in petroleum and gas, processed food, animal feed, petrochemical, oleochemicals and medicine. It has also recommended trade and investment cooperation in services like medical, healthcare, diagnostics, advertising, audio-visuals, education, IT and telecommunications, financial services, tourism and travel, transport, architectural, construction and engineering, human resources development, accounting and taxation
According to the joint CECA report, the potential areas for investment crossflows are – construction, telecommunications, civil aviation, education, tourism, R&D, design and prototyping and regional distribution centres. The study also recommended that enterprises of both the countries should consider establishing joint ventures and co-marketing instead of competing in the global market.
The Malaysian minister said that her country continued to be an attractive destination for foreign direct investment (FDI) flows. Till December 2006, 81 projects with a total investment of $159.3 million from India have been implemented. In the current year till September, 2007 four projects have been approved with Indian investment totaling up to $ 497.1 million.
On being asked about the recent agitation by ethnic Indians in Malaysia asking for better living conditions and facilities, she said "this is a political game played by the Opposition parties."
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`Make Wales gateway for India's European operations'
http://www.financialexpress
ASHOK B SHARMA
Posted online: Monday , November 26, 2007 at 2245 hrs IST
New Delhi, November 26 While India's negotiation for a free trade agreement (FTA) with the European Union is in the process, Wales has begun marketing saying that it is the gateway to the continent. The Welsh people, known in the history for asserting their identity, are not prepared to miss this opportunity.
The Welsh deputy first minister, Ieuan Wyn Jones, who is also the minister for Economy and transport, is in India with a 20-member trade delegation. "This is the first ministerial trade delegation to India," he said.
In an interaction with the industry organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) on Monday in Delhi, Jones said : "Wales is the place to base your UK and European operations. Like India, we are a dynamic country ready to accelerate business growth."
He pleaded that Wales was the cost effective business base in an English-speaking country. One can get an office accommodation in Cardiff at rates 25% lower than that in London. The region has presence of sectors like ICT, automotive, business services, creative services and bio-pharma, while London being only two hours drive, he said.
"Wales is well connected by rail, road and air links to major UK and European cities," he said and pleaded that the region was congenial for business with low interest rates and inflation rate. Jones said that a number of Indian Companies, including the Tata group have begun investing in Wales
"We are not only looking for investments, but also for opportunities in trade with India in a number of products," said the director of International Business Wales, Ian Williams. He said that the delegation would meet the Indian commerce minister, Kamal Nath and discuss cooperation in areas like entertainment industry, biotechnology, small and medium enterprises, coal gasification and liquification, auto components, clean technologies, life sciences and knowledge driven technologies.
Afghanistan to boost agri exports
In return, seeks Indian investments in various sectors
http://www.financialexpress
ASHOK B SHARMA
Posted online: Monday , November 26, 2007 at 0009 hrs IST
New Delhi, Nov 25 Afghanistan wants to boost its exports of dry fruits, fresh fruits and vegetables, marbles and natural stones to India, and in return is seeking greater Indian investments in the agro processing, construction sector, and in trade and services.
"Our exports to India have declined since over a decade due to the disturbed situation in our country. Now our exports to India are only around $30 to $40 million. We want to increase our exports to India and want to attract more of Indian investment, which is now flowing at the rate of $10 to $15 million," Omar Zakhilwal, president and CEO, Afghanistan Investment Support Agency (AISA), told FE.
He said that his country has exportable varieties of dry fruits like almond, fig, raisins, apricot, pistachio, and fresh fruits like grapes, pomegranates, melons, apples, and medicinal herbs. "The growing middle class in India, with their rising income, would like to consume these healthy food from Afghanistan," he said, and added that Indian investors can also take the opportunity to invest in the agro processing sector in his country.
Zakhilwal was in India last week and addressed the representatives of the Indian industry at an interactive session hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI). The Afghanistan government has launched a regional economic cooperation programme, which includes countries like Pakistan, India, Iran, Tajikistan, Turkmenistan, Uzbekistan, and West Asian countries. The first meeting of this group was held in Kabul in December 2005, followed by a meeting in Delhi in November 2006. The next meeting is in Islamabad in March 2008.
Afghanistan expects that with its new membership to SAARC, its trade relations with India and other countries of South Asia would get a boost
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http://www.financialexpress
ASHOK B SHARMA
Posted online: Monday , November 26, 2007 at 2311 hrs IST
New Delhi, Nov 26 Expressing optimism that India was looking forward to the successful conclusion of the WTO Doha Round negotiations by 2007-end or at the latest by early-2008, commerce and industry minister Kamal Nath on Monday said New Delhi was willing to show flexibility to achieve such an outcome, but the onus for movement is clearly with the large developed countries.
"India has been engaging constructively and actively with other fellow member countries of the WTO towards this end. Such a conclusion can only be possible if we are faithful to the mandate and the outcome reflects a clear balance between market opening and the development needs of the majority of the membership," Nath said during a meeting with the Netherlands Foreign Affairs Minister Frank Heemskerk here.
On India-EU Free Trade Agreement (FTA), India and Netherlands observed that common areas have been identified and further discussions would be held in the 3rd round, which is slated to be in December, 2007 in Brussels. Discussions have also been held in other areas to be covered in the agreement, viz., SPS and TBT measures, intellectual property rights and Geographical Indications, competition policy, government procurement, dispute settlement etc.
On the controversy of reports by European NGOs that the Indian textile industry used child labour and violated human rights, Nath said: "It is important to put this behind us. The matter is closed and I do not want to see this proceed," he said. Nath had raised India's concerns over the issue when the Netherlands Minister for Economic Affairs Maria van der Hoeven visited India last month.
On the issue of Australia and Thailand approaching the WTO, protesting the subsidies given by India to the sugar sector, Nath said the subsidies given to exporters on transport of sugar were compatible with norms laid down by the world body.
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