India is unlikely to launch a dispute at the World Trade Organisation (WTO) against the United States over reciprocal tariffs, as both sides are currently engaged in negotiations aimed at reaching a trade deal.
This comes despite India seeking consultation with the US at the WTO on the 25 per cent import duties on steel and aluminium products.
This is the first case involving India and the US at the WTO after both sides decided to withdraw all the seven pending cases at the multilateral body during the Joe Biden administration.
“The agreement has a provision that if a member believes that another member’s safeguard measure is unjustified, it can ask the member taking the measure within 30 days for consultations. This is a procedural thing. This is not escalatory but simply reserves the right to retaliate after the consultations,” a government official said, requesting anonymity.
India argued that, notwithstanding the US’ characterisation of these steps as security measures, they are in essence safeguard measures. “The United States failed to notify the WTO Committee on Safeguards under Article 12.1(c) of the Agreement on Safeguards (AoS) on taking a decision to apply safeguard measures,” it said in its submission at the WTO.
“India looks forward to receiving a prompt reply to this request, and to setting a mutually convenient date and venue for the above-mentioned consultations,” it further added.
However, the official said India is unlikely to join China and others in dragging the US on the country-specific reciprocal tariff. On April 4, China requested consultations with the US with respect to measures that imposed universal and country-specific additional duties on imports from China.
“This will ultimately be a political call. The US move is a blow to the global trade architecture but does the solution necessarily lie in the same mechanisms that are under stress for several years? We are anyway engaged with the US to find a solution through a bilateral trade agreement,” the official said.
The Appellate Body at the WTO remains defunct, with the United States continuing to block appointments of judges to the organisation’s highest adjudicating authority, effectively preventing final rulings on trade disputes between member countries.
The US, on April 10, told the Council for Trade in Goods that it is not, through its reciprocal tariff action, altering or abrogating its WTO tariff bindings or commitments. “Rather, the US is taking action it considers necessary for the protection of its essential security interests. For this reason, the US invokes and is maintaining this measure pursuant to the essential security exception in the WTO Agreement,” it added.
China, in its representation at the WTO, said it firmly believes that any divergences on trade issues cannot justify unilateral tariff war, and that there are no winners in the trade war. “We deeply regret that the US unilateral and escalatory trade measures have dragged the global economy into enormous uncertainty. Each day comes with ‘surprises’, and brings new disruptions, undermining the stability that businesses and all economies depend on, including China,” it added.
Source: Business Standard
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