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15 Nov 2019, Edition - 1585, Friday

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Coimbatore

Keep plantation commodities under exclusion list under proposed RCEP

Covai Post Network

Coimbatore : United Planters Association of Southern India (UPASI) Thursday expressed serious concern on the Regional Comprehensive
Economic Partnership (RCEP) negotiation which is currently underway.

UPASI fears that any further reduction in the import tariff would severely affect the price realisation of plantation commodities, putting the plantation sector to further difficulty and distress, its President, AL RM Nagappan said in
a release.

The plantation commodities like tea, coffee, natural rubber, cardamom, pepper were exposed to international competition since April 2001, when the quantitative restriction was lifted as per the commitments under WTO and signing of ASEAN Agreement in 2009 has further opened up the Indian market to the plantation producing countries like Indonesia, Vietnam, Malaysia, Thailand, he said.

Under the ASEAN Agreement, the import duties were gradually reduced since 2009 for tea, coffee and pepper while natural rubber, cardamom and few tariff lines on coffee were kept under exclusion list and current import tariff for ASEAN countries is 50 per cent for tea and coffee (100 per cent under WTO for other countries) and 51 per cent for pepper (70 per cent under WT0).

As per UPASI analysis, during 2018-19 the trade deficit in the plantation commodities is Rs.[-] 5,716.64 crore with RCEP countries, while had
overall trade surplus in the plantation commodities to the tune of Rs. 4,368 crores.

This indicated that plantation commodities will be losing significantly if the RCEP agreement materialised and there was fear that further reduction in tariff proposed can only worsen the trade deficit in the plantation commodities and will make things miserable for the sector, which is already facing challenging times on account of low prices vis-à-vis high cost of production.

China the partner country in the proposed RCEP posed challenges and it being the largest tea producer and its ability to produce to the needs of the export market in quick time, was an immense threat to the Indian tea sector.

Though China is a largest green tea producer in the world it also produces black CTC teas for the export market and with duty advantage and logistical advantage it may target Indian market.

Moreover, there was a fear that the Rules of Origin (RoO) criteria will be taken advantage of to route tea through any of the ASEAN countries who have a duty advantage,  vis-a-vis China. The recent instance of Vietnamese pepper coming through Sri Lanka was a case in point in this regard. 

While there may be compulsive reasons for the Government to go in for trade agreements with other nations/regions, the interests of
the domestic plantation industry should be taken care of, especially since large number of people are dependent on this sector, he said.

 Given the difficult situation prevailing in the plantation sector, it is hoped that the plantation commodities will be kept under the exclusion list under the proposed RCEP as otherwise, it would have serious implications for this highly labour-intensive agro-industry, Nagappan said. 

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