Monday, June 11, 2018

Is India Relaxing Offending Ban on Chinese Toys?

I recently made a fine blog find called "India in the WTO" which does a good job keeping track of India's international economic relations. Pursuant to my recent posts about China being in the process of filing a WTO complaint against India over the latter's non-specific toy ban [1, 2] India's Department of Commerce has just come out with a new notification concerning the ban:
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TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY

PART-II, SECTION—3, SUB SECTION (ii)

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE AND INDUSTRY

DEPARTMENT OF COMMERCE

NOTIFICATION NO. 91 /(RE-2008) / 2004-2009

NEW DELHI, DATED 2nd MARCH, 2009

S.O. (E) In exercise of powers conferred by Section 5, read along with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992, also read along with paragraph 2.1 of the Foreign Trade Policy, 2004-09, the Central Government hereby amends Notification No. 82 /(RE-2008) / 2004-2009 dated 23rd January, 2009 as under:-

1. “Import of ‘Toys’ from China appearing under ITC Codes 9501, 9502, 9503 of Schedule – I of ITC(HS) Classifications of Export and Import Items is prohibited for six months with immediate effect and until further orders. However, import of toys from China accompanied by the following certificates shall be permitted:

(i) A certificate that the toys being imported conform to the standards prescribed in ASTM F963 or standards prescribed in ISO 8124 (Parts I-III) or IS 9873 [Parts I-III];

(ii) A Certificate of Conformance from the manufacturer that representative sample of the toys being imported have been tested by an independent laboratory which is ILAC [International Laboratory Accreditation Commission] accredited and found to meet the specifications indicated above. The certificate would also link the toys in the consignment to the period of manufacture indicated in the Certificate of Conformity”.

2. This issues in public interest.

(R.S. Gujral)
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Seema Sapra sees it as a relaxation of the (blanket) ban on Chinese toy exports. With all due respect to Seema, I am not quite sure about this. While spelling out conditions by which Chinese toys will not be covered by the ban, Commerce appears to be putting not-insignificant roadblocks in front of Chinese toy exporters concerning verification that toys meet certain safety standards. I don't claim to be an expert on toy safety, but this certainly looks like a case of much-vaunted non-tariff barriers (NTBs). It is probably neither inexpensive nor quick to get these certifications. Moreover, as the ban was (supposedly) going to be in place only for six months, the effort may not pay off for toy exporters.

Being cynical old me, this is an NTB highly reminiscent of the formidable license Raj. Instead of giving local firms the run-around, they're giving foreign ones the same red tape. In either case, the result is similar: frustration not creation of commerce to satisfy special interests. Here, the supposed beneficiaries are domestic toymakers. Unfortunately, India has considerable expertise in this unsavory activity. To Shri Kamal Nath, I once again implore you: Let my people go; set the Bratz free.

UPDATE: The official news agency Xinhua views this as a "lifting" of the toy ban, so I gather they're more or less satisfied.

UPDATE 3/19: Well, not quite. The countries are in "bilateral consultation" and China doesn't rule out filing a case at the WTO.

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