India-US steel feud escalates as WTO sets up key panel

7th May 2018

The ongoing trade spat between India and the US has intensified after the World Trade Organization (WTO) set up a compliance panel following India’s request on the non-implementation of the appellate body’s ruling against countervailing duties (CVD) imposed by the US on Indian hot-rolled carbon steel products.

Confirming the move, a commerce ministry official speaking under condition of anonymity said the compliance panel was set up on Friday after a meeting of the dispute settlement body, despite the US opposing the move.

The case pertains to India filing a WTO complaint in 2012 against the US CVD on India’s exports of hot-rolled carbon steel flat products. The dispute settlement panel gave a mixed verdict in July, 2014 which was further challenged by both countries before an appellate panel, the highest adjudicating body at the WTO.

India achieved a significant victory as the appellate body in its report in December 2014 ruled that the CVD imposed by the US is inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures (ASCM). The appellate body asked the US to amend the US Code which mandates cumulating subsidized imports and dumped imports to arrive at the injury margin. India had particularly challenged this measure as it has been affecting the CVD investigations by the US, leading to exorbitant duties against India.

However, India complained to WTO in June 2017 that even after the due period, US has not amended its domestic laws to make them compliant with the WTO rules. Both sides went through a consultation period but failed to resolve the matter. India finally requested setting up a panel to examine the US compliance in this matter which was accepted by the dispute settlement body on Friday.

India and the US have been engaged in a series of trade battles recently. The Trump administration has been accusing India of unfair trade practices and has challenged most of its export subsidies at WTO. It has also not granted India an exemption on the unilateral hike in steel and aluminium tariffs, unlike its other strategic allies. It has also announced a review of generalized system of preferences through which Indian exporters get preferential market access to the US and has kept India in its intellectual property rights priority watch list in its latest Special 301 report. The US treasury department earlier this month also added India to the currency practices watch list.

Source: LIVEMINT