World Trade Organisation (WTO) Current Affairs

India moves WTO against US

India has moved the World Trade Organisation (WTO) against the US as it has not yet complied with the rulings of the WTO pertaining to imposition of high import duty on certain Indian steel products.

In December 2014, the WTO’s appellate body pronounced a ruling against the act of US which is imposing high import duty on certain Indian steel products. It had ruled that the imposition of import duty on steel products was inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures.  

The Agreement on Subsidies and Countervailing Measures (the SCM Agreement) – addresses two separate but closely related matters-The multilateral disciplines on the use of subsidies and the conditions under which Members may apply countervailing measures.

India has sought consultation with the US for compliance of the WTO’s rulings. If the US refuses to comply then India has planned to approach the WTO’s compliance panel.

In order to comply with the WTO rulings on countervailing duties on imports of hot-rolled carbon steel products from India, the US needs to amend its domestic norms.

Earlier, the US had moved the arbitration panel of the WTO against India as it complained that India had failed to remove trade restrictions on American poultry.

WTO

The WTO is an inter-governmental organization for governments to negotiate global trade agreements and progressively liberalizing trade. The WTO operates a system of trade rules that apply to all its members. The WTO is also a place for Member governments to settle their trade disputes. Its located in Geneva, Switzerland. It was established on 1 January 1995 and its official languages are English, French and Spanish.

Countervailing duties are those duties that are imposed by a country to counter the negative impact of import subsidies to protect domestic producers.

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India challenges WTO panel’s ruling in US poultry case to DSB

India has challenged a World Trade Organisation (WTO) panel’s ruling that challenges country’s ban on United States (US) poultry product imports.

In this regard, India has appealed to the Dispute Settlement Board (DSB) of the WTO.

Background

  • In 2007, India had banned imports of various agriculture products including poultry meat and eggs from the US. They were banned as a precautionary measure to prevent outbreaks of Avian Influenza.
  • In March 2012, US had dragged India to the WTO for banning these products.
  • WTO ruling: WTO panel’s ruling in October 2014 in this regard had said that India’s measures are arbitrarily and unjustifiably discrimination on international trade and constitutes a disguised restriction on it.
  • US Stance: US also had contended that India’s Avian Influenza measures amounted to an import prohibition was not based on the relevant international standard or on a scientific risk assessment.
  • India’s Stance: While, India has claimed that the panel ruling is committed with several legal errors in its interpretation and application of numerous articles of the Sanitary and Phytosanitary Measures (SPS) agreement.

Why US is focusing on India’s poultry business?

  • US is one of the world’s largest exporters of chicken meat. It is looking India as one of its potential markets poultry exports.
  • While, in past few years India’s broiler meat consumption has increased and has touched to 3.72 million tonnes in 2014 from 3.45 million tonnes in 2013.

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