Japan has raised the stakes in a trade dispute with India over New Delhi’s definitive safeguard duties on several iron and steel products at the World Trade Organization by calling for a panel to rule against India’s allegedly inconsistent measures that violated global trade rules, according to a request from Tokyo.
Last year, the finance ministry imposed definitive safeguard duties on imports of “hot-rolled flat products” of non-alloy steel in coils, ostensibly to counter sudden, unforeseen surge in imports which cause injury to domestic steel industries. New Delhi would have taken recourse to the safeguard measures on grounds that the import surge in hot-rolled flat products is the result of unforeseen developments.
Subsequently, India levied safeguard duties to the tune of 20% ad valorem (according to the value) minus anti-dumping duty on imports of hot-rolled flat products between 14 September 2015 and 13 September 2016; 18% between 14 September 2016 and 13 March 2017; 15% between 14 March 2017 and 13 September 2017; and 10% between 14 September 2017 and 13 March 2018.
But, according to Japan, India failed to follow the benchmarks set out in the WTO safeguards agreement before imposing definitive duties. “India failed to make reasoned and adequate findings and conclusions in its determination with respect to the alleged unforeseen developments, and how those alleged unforeseen developments resulted in increased imports of products concerned causing or threatening serious injury to domestic producers,” Japan maintained in its complaint.
India, according to Japan, violated several core provisions of the WTO Agreement on Safeguards by not following the procedures and provisions in determining the “causal link between the alleged increase in imports and the alleged serious injury and/or threat of serious injury to the domestic industry”.
Further, the safeguard measures clamped by the finance ministry were “beyond the extent necessary to prevent or remedy serious injury”, and failed to consult with interested parties.
Japan’s first-time request for establishing the panel came after India failed to provide convincing reasons during the consultations.
Tokyo’s request for the panel will come up for consideration at the dispute settlement body (DSB) meeting on 21 March.
In all probability, India might block Japan’s first request for the panel at the meeting. But New Delhi will not be able to prevent the establishment of the panel if Tokyo presses ahead with a second request after the upcoming dispute settlement body meeting.
Meanwhile, in a festering trade dispute with the US over billions of dollars of subsidies and domestic content requirements for the renewable energy sector in eight American states, India has made a second request for the establishment of a panel which will be adopted on 21 March.
India has asked the WTO panel to rule against 11 renewable energy programs in eight American states that provide subsidies to targeted recipients on the condition that they use local manufactured products.
India sought the panel to examine different subsidy and local content programs being implemented by eight American states, sub-federal entities—Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota.
The US had blocked India’s first request on grounds that New Delhi launched the dispute “for purely political reasons”. Further, “India does not export significant amount of renewable energy equipment to United States, and the state-level programs identified in India’s request would appear to have virtually no effect on commerce,” the US had argued during the last DSB meeting.