2019 – Posted in: Daily News

US DRAGS INDIA TO WTO OVER INCREASE CUSTOM DUTIES

For: Preliminary & Mains

Topics covered: Why US drags India to WTO, GATT, What is the issue?

The US dragged India to the WTO by filing a complaint against India’s move to increase customs duties on 28 American goods.

The US has alleged that the duties imposed by India appear to be inconsistent with two norms of GATT.
US has stated that India does not impose these duties on like products originating in the territory of any other WTO member nation.
US said that the additional duties imposed by India “appears to nullify or impair the benefits accruing to the US directly or indirectly” under the GATT 1994.

GATT is a WTO pact.
It is signed by all member countries of the multi-lateral body.
It aims to promote trade by reducing or eliminating trade barriers like customs duties.

As per the WTO’s dispute settlement process, the request for consultations is the first step in a dispute.
Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation.
After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.
This case assumes significance as officials of both countries would be meeting next week here to discuss trade-related issues.
The two countries are also at loggerheads at the WTO on other issues.
The US has challenged certain export promotion schemes of India, while India has challenged USA’s unilateral hike on customs duties on certain steel and aluminium products.

The US has rolled back export incentives from India under its GSP programme and New Delhi has imposed higher customs duties.
Higher Custom duties imposed on 28 American products including almond, pulses, walnut, chickpeas, boric acid and binders for foundry moulds.
The other products on which duties were hiked include:
Certain kind of nuts, iron and steel products, apples, pears, flat-rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets.
The duties were hiked as retaliation to the US move to impose the highest customs duties on certain steel and aluminium goods.
India’s exports to the US in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.

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