Brussels, 15/05/2000 (Agence Europe) - The European Union has decided to authorise India to export an additional 3,500 tonnes of textiles to the European Union this year, in recognition of the concrete action taken by this country to reduce its customs duties, which were particularly high and sometimes even prohibitive for Community exporters. Other actions by India in the direction of abiding by all the undertakings made to the Europeans under the 1994 Memorandum of Understanding on textiles trade are nonetheless a prerequisite opening this possibility of additional exports and the remainder of the supplement (4,500 tonnes) requested by India as an "exceptional flexibility".
Commissioner Pascal Lamy, who had announced this good will gesture at the conclusion of his visit to India (see EUROPE of 11 March, p. 8), voiced confidence that the measure, approved last week by the Council, would "pave the way to full implementation of our Memorandum of Understanding". This agreement, which was to make possible what could not be achieved in the Uruguay Round, i.e. the consolidation of important Indian tariff reductions on textiles and clothing, made provision for a number of commitments for each of the parties. The EU made the concession of the so-called "exceptional flexibilities" (possibilities of transfers between different categories of textiles and clothing subject to quotas, enabling India to boost its exports to Europe), subject to notification of the World Trade Organisation (WTO) of the jointly agreed consolidated tariff level. The measures are generally meant to achieve a rapid and effective drop in customs duties for 149 tariff headings (the 67% rate applied in 1995 must drop to an average of 32% in 2000, with smaller reductions for other categories). The consolidation of the targeted rates, which excludes the possibility for India to raise its customs duties, did not take place until December of last year. In addition to this delay, which has led to suspension of the "exceptional flexibilities", this commitment contains, from the European standpoint, a number of duties superior to agreed levels. The Commission is consequently expecting Indian authorities to lower these levels "to make possible the grant of the remainder of the 8,000 tonnes requested". This review implies additional notification aimed at a more consequential tariff reduction for 71 of the 220 headings notified to date; bilateral consultations on this subject were held last week in Geneva. The Commission's spokesman added that India must renounce the conditions to which the reductions of duties are for the time being subject, before the EU proceeds -"immediately"- with formal adoption of the implementing regulation concerning the advance of 3,500 tonnes.