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The eBearing News
August 6, 2004
India and Thailand Reset Bearing Tariffs
copyright © 2004 eBearing Inc.
India and Thailand have settled long-running trade negotiations, cutting high tariffs on 82
items, including bearings.
The changes follow an October 2003 free trade agreement eliminating all tariffs between the
two countries by 2010. Eventually, Bangladesh, Myanmar and Sri Lanka are expected to be
included in that free trade area.
Trade between the two countries now totals more than USD $2.1 billion each year, but with Thailand running
a substantial deficit. The tariff adjustments, particularly because they involve high value products,
are expected to boost trade on both sides.
Thailand now imposes tariffs ranging from 1% to 60% on products from India, while India charges duties
on Thai-origin products that range from 10% to 100%.
The key stumbling block in the Bangkok negotiations had been establishing rules to define "origin" and
"substantial transformation," with bearings the key manufactured product involved.
Under substantial transformation rules now, tariffs on manufactured products are based on the degree
of change between raw material (particularly imported raw materials) and the end product.
India, with the stronger manufacturing economy, wanted both direct-origin and substantial transformation
products classed together, while Thailand's negotiators contended doing so would effectively wipe out
their exports from five industries, including bearings.
The final compromise states ball bearings and four other items must contain 20% to 40% local content
to qualify as substantially transformed and local origin.
Tariffs on all the negotiated products will be cut in half by the end of September 2004, and cut in half
again by September 2005. By September 2006, the treaty requires eliminating all tariffs.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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