Cement export to India: PSQCA objects to industry move seeking BIS waiver
KARACHI (July 28 2007): The Pakistan Standards and Quality Control Authority (PSQCA) has taken strong exception to cement industry's move seeking help from authorities in Pakistan to get waiver from the Bureau of Indian Standards (BIS) on import of Pakistani cement in India.
The PSQCA Director General, Dr Abdul Ghaffar Soomro, commenting on the appeal made by All Pakistan Cement Manufacturers Association (ACMA) in this connection, said: "It is very strange that the cement industry of Pakistan is seeking waiver from the procedures required by BIS to issue import authorisation for Pakistani cement."
He said that cement in Pakistan is a mandatory product for certification by PSQCA to meet required standards before sale in the market. "We do not allow sale of even imported cement in Pakistan without certification and testing by PSQCA," he said, and added that imports of cement from China, in the recent past, were also subject to tests which were carried out by PSQCA. The standards are set by PSQCA after due deliberations with the stakeholders and overview by experts from practising profession and academy.
The cement industry of Pakistan, eyeing the Indian market for export of surplus available capacity, finds 'Technical Barriers to Trade' (TBT) coming in the way of their exports. The last consignment of cement exported from Pakistan to India faced difficulty after market sales, the reason being that the landing of goods in India are not allowed without approval of BIS regarding its quality and meeting BIS notified standards.
The cement industry of Pakistan had found Indian market as immediate available market because of demand in India due to its surging development pace racing with other Asian economies. BIS, as the national standards body, represent India on International Organisation of Standards (ISO). Following the framework of TBT agreement of WTO, BIS attempts to base the national standards on international standards as far as possible. The national standardisation body of India, dealing with TBT, has formulated more than 18,000 standards. Of these, about 5,000 are harmonised with international standards. The rest are more or less related to the environment in which the consumer interests are secured.
Qualifying standards equally apply on imports and locally manufactured cement for sale in Indian market. It cannot be sold without certification and continuous monitoring.
Cement industry of Pakistan is well aware of the situation and more sensitive and cognisant of the fact that cement cannot be exported to India without certification by BIS. The sensitiveness and cognisance of the fact became more evident when last exports of cement consignments faced difficulties for both sides.
Sensing that this technical crossover was not possible without qualifying for the standard set by BIS, Pakistan's cement industry has now preferred political course for seeking waiver from BIS tests and certification on imports of cement in India from Pakistan.
The cement manufacturers claim that without political intrusion by President and Prime Minister of Pakistan, Indian government may not allow import of cement bypassing the legislation under which BIS is the national inquiry point in WTO, as well as accountable to standardisation of products in the interest of consumers in India.
The PSQCA Director General said that Pakistan's cement industry has capacity and surplus to enter Indian market through preferential and free trade agreement. In such a situation it needs to strike signing of bilateral or Mutually Recognised Agreements (MRAs) in respect of accepting each other's test results on cement.
Soomro said that Pakistan's cement industry should come forward for compliance of TBT agreement of WTO, a single package deal for country. The contact of cement industry with PSQCA would give reasons to talk with the counterpart, BIS, in India to find some solution in facilitating and in quicker disposal of this technical barrier.
This could be done through either signing of MRA or accepting the test results of each other on extraordinary case basis as it would be cheaper for India to import cement from Pakistan.
He said that the responsibilities of being inquiry point in WTO requires to reply to the queries of the members who are counterpart representative of their countries. Interfacing of PSQCA and BIS could resolve this issue in the way it should be resolved, and not the way the cement industry has devised, he said.
He further said that the best recourse appears to be also available in the TBT, which encourages countries to recognise each other's testing procedures under MRA. WTO also recognises that national circumstances necessitate differences in policies across member countries.
"Fortunately," he said, "we see a lot of ground that BIS will accept our testing procedures as their specifications for portland cement are same vis-à-vis fineness, strength and physical and chemical properties. Both countries seek the same outcome of results based on the specifications of cement notified by PSQCA and BIS. The techniques of measurements may only differ to some extent." He said that PSQCA as enquiry point under WTO has approached BIS on the issue of cement imported in India from Pakistan.
One of the consumer interest group members criticised the approach of cement industry and said that this move was similar to the one which was made by bedlenin exporters in the case of EU. Exporters had preferred political pressure for bailing them out from anti-dumping duty imposed by EU of two digit percentage values.
The arithmetic of accounts did not play its role to solve this problem earlier. Pakistan suffered because the exporters wanted recourse through pressure from the Ministry of Commerce and Government of Pakistan for removal of anti-dumping duty imposed by EU. The anti-dumping duty continued and was reduced only when the cases were investigated.
Another professional conversant with WTO agreements commenting on technical barriers to international trade and role of TBT agreement said that technical specifications for goods represent an increasingly important type of barrier in the global context.
He said that WTO recognises the important contribution of technical measures to the efficient functioning of national economies and encourage their development. Technical regulation, standards and conformity assessment procedures for products, processes and production methods are the present practices in all the countries interested in protecting domestic industry and consumer interest. All products including industrial and agriculture are subject to provisions of TBT agreement, which is again an issue to comply and to prepare.
Another approach to technical harmonisation, he said, has also been suggested in the TBT agreement. Referring to the cement issue, he said that since the portland cement specifications in Pakistan and India are almost similar, except the employed methods of making results, it is the best case for mutual recognition of each other's test results through national inquiry points recognised by WTO. The proper counterpart for PSQCA is BIS.
Pakistan will have another advantage if the BIS accords recognition to Pakistan standards as India serves the other markets in Saarc. In such an event, Pakistani goods from India could reach other markets and that is the way things should work, he said.
Under arrangements Saarc countries have already agreed to have harmonised standard of cement and, for this, Bangladesh's national standard body, Bangladesh Standard & Testing Institute (BSTI),. was assigned the role of convenor.
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