India on Tuesday secured the green signal to establish a World Trade Organization (WTO) dispute settlement panel against renewable energy programmes in eight American states that New Delhi says violate global trade rules on subsidies and local content requirements. In a separate development, India also blocked a first-time request from Japan for establishing a panel to adjudicate over Indian safeguard duties on several iron and steel products that Japan says violate global trade rules. At a dispute settlement body meeting, India sharply disagreed with the US that New Delhi’s request for establishing the panel to rule against the allegedly illegal domestic content requirements implemented by several American states was influenced by political considerations.The US accused India during the last dispute settlement body meeting on 20 February that New Delhi’s request for establishing the panel in the renewable energy dispute was “for purely political reasons”. The US also maintained that India has no commercial interest in the renewable energy sector.
India dismissed the US charges saying “the request for the establishment of the panel is driven by the sole desire to ensure that measures maintained by the members (such as the US) do not negate the desired objectives and expected benefits to other members under WTO,” according to a trade official present at the meeting. India said it has been repeatedly raising its concerns on the US renewable energy programmes in the WTO Trade-related Investment Measures panel as well as the committee on subsidies and countervailing measures since 2013. The programmes are in the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota.
Despite the US programmes being allegedly inconsistent with WTO rules, India refrained from launching dispute settlement proceedings against the US while seeking information in good faith, it said. “Since the efforts through the committees did not yield satisfactory responses”, India requested for consultations with the US on 9 September 2016 to resolve the issues.With the consultations having failed with the US, India said it was left with no option but to press for establishing a panel. The US, however, stuck to its position saying the row was launched “for political reasons”. “This dispute is not warranted,” the US said at the meeting, maintaining it would “vigorously defend” its measures in the renewable energy sector before the panel.
The EU, Brazil, China, Indonesia, Norway, Singapore, Russia, Turkey, South Korea, Japan, and Taipei joined as third parties in the dispute. India and the US have to decide the panel’s members. If the two sides fail to reach an agreement on the composition of the panel, the WTO director general can decide the members. A separate dispute involved Japan challenging India’s so-called definitive safeguard duties on several iron and steel products. Japan said it has been engaged in constant dialogue with India and made sincere efforts to resolve the dispute.Japan challenged India’s imposition of 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. Japan alleged the safeguard duties violate global trade rules.
India maintained it made vigorous efforts to explain “the legal framework as well as the exceptional circumstances which necessitated the safeguard measures.” India said the duration of its safeguard measures are for a shorter period than that provided under the safeguards agreement. New Delhi will not be able to block the establishment of the panel if Japan presses with a second request at next month’s dispute settlement body meeting.