2019 – Posted in: Daily News

INDIA BEATS U.S AT WORLD TRADE ORGANISATION

For: Preliminary & Mains

Topics covered: WTO’s appellate body, WTO, About the case

News Flash

A WTO dispute resolution panel has ruled in favour of India in a case against the U.S.

Case

India’s win at the WTO is a tit-for-tat trade dispute as the US had complained in 2014 and won against India in a case on the incentives for domestically produced solar cells and modules under the Jawaharlal Nehru Solar Energy Mission.

Highlights

The panel said that America’s domestic content requirements and subsidies provided by eight of its states in the renewable energy sector are violative of global trade norms.
The panel concluded in its ruling that “the measures” of the US “are inconsistent” with certain provisions of the General Agreement on Tariffs and Trade (GATT).
The ruling stated that 10 measures implemented by the U.S. pertaining to the renewable energy sector are inconsistent with its obligations under GATT 1994.
It said the U.S. has “nullified or impaired benefits accruing to India under that agreement”.

Background

In September 2016, India dragged the U.S. to WTO’s dispute settlement mechanism over America’s domestic content requirements and subsidies provided by eight states in the renewable energy sector.

Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware, and Minnesota were the eight States providing subsidies.

India had stated that the measures are inconsistent with global trade norms because they provide less favourable treatment to imported products than to like domestic products, and because the subsidies are contingent on the use of domestic over imported goods.

Way Forward

The ruling of dispute panel can be challenged in the WTO’s appellate body which is part of the dispute settlement mechanism of the Geneva-based multilateral body.

Recent story

The U.S. has rolled back export incentives from India under its GSP programme and New Delhi has imposed higher customs duties on 28 American products.

World Trade Organisation

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.

It is a forum for governments to negotiate trade agreements also it is a place for them to settle trade disputes. It operates a system of trade rules.

The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.

WTO’s Appellate Body

The Appellate Body was established in 1995 under Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). It is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought by WTO Members. The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate Body Reports, once adopted by the Dispute Settlement Body (DSB), must be accepted by the parties to the dispute. The Appellate Body has its seat in Geneva, Switzerland.

Source: The Hindu

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