We oppose the 'early harvest' concept and insist on a backloaded tariff reduction programme.

The forthcoming ministerial round of the WTO at Seattle has thrown up a host of issues for domestic industry, which has realized just what was signed away at Uruguay. All segments of industry have, therefore, used their respective associations to formulate a charter for the Seattle Round, which they have submitted to the Government. The domestic chemical industry particularly feels caught in a blind; tariff barriers were lowered drastically without any improvement in infrastructure in terms of power and port facilities, just when the South east Asian crisis erupted. The implications of this, the industry complains, are that the domestic chemical industry has been exposed to price volatility along with unequal international competition. Which in turn has meant a rise in the levels of non-performing assets (NPAs) for the entire sector. Deepak C. Mehta Chairman, trade and business development expert committee of the Indian Chemical Manufacturers Association (ICMA) and managing director, Deepak Nitrite Ltd, spoke to Gouri Agtey Athale on these and other industry concerns.

What measures has the ICMA proposed to government to safeguard interests of the domestic chemical industry?
We would like tariff barriers to be maintained. This would offset the intrinsic disadvantage faced by Indian Industry, the effects of the South East Asian crisis, ehich will felt till 2004, and counter the rising threat of new capacity addition in Middle East. Look at all the other companies: Japan levies specific duties, depending on the nature of distribution. There is a high incidence of tariff peaks, despite apparently low average tariffs to protect specific products.

Against this background, we have suggested to the government, through a presentation to FICCI that government should increase the tariff wherever there is a scope upto at least the 'bound' level. We oppose the 'early harvest' concept and insist on a backload tariff reduction programme. This should be in line with the reductions done by the developed countries.

The government should also press for the constitution of a panel which will look into the issue of what constitutes subsidy. The Indian chemical industry acts as a conduit for subsidies to other sectors. Therefore, we want recognition of this cross-subsidization and the imposition of an additional tariff, of 5 to 6 percent, which could be called an agricultural development tariff, over the 'bound'rates.

Trade is increasingly being linked to social issues. How does this affect your sector?
We have suggested that the government oppose linking social and environmental issues with trade since this would amount to extra territoriality, that is, enforcing the laws of the country on another. We believe that the developed countries have abused the environment on the basis of which their economies have grown. Bu linkling teade with these issues, these countries are following a policy of double standards. We would like the government to evolve a consensus among all developing nations and take a proactive role against restrictive policies formulated on environmental lines.

The government should, therefore impose a special environment protection tariff of 3 to 5 percent over and above the 'bound' rate, while the developed world should provide sales tax set off for goods from developing countries as a contribution towards an environment rejuvenation fund.

How serious are cases of dumping? What is ICMA's stand on this?
Dumping is being done, but at present international prices have fallen, hence it is difficult to categorise this as dumping. However, phenol and acetone are two major products where dumping has been proved to have been done in India. We have proposed to the government that a worldwide database or information system be created which will give information on cost structures of products in various countries. The alternative to this is to make it mandatory for each member country to provide free and unrestricted cost information as may be wanted by another member.