India looks to counter U.S. move on trade sanctions

The Centre is weighing “all” options including retaliatory measures to counter a U.S. move to seek imposition of more than $450 million in trade sanctions against India on the grounds that New Delhi failed to comply with the World Trade Organisation (WTO) order in the poultry import ban case.

The WTO Appellate Body had found that India’s import prohibition on poultry and poultry products was ‘discriminatory’ and ‘more trade-restrictive than required’, and therefore violated WTO norms. As per the U.S., India failed to comply with the WTO body’s recommendations within the set deadline (of June 19) -- a claim which New Delhi is contesting on technical grounds.

The U.S. now wants an arbitration panel under the WTO to approve imposing trade sanctions that could cost India more than $450 million annually.

‘Sequencing agreement’

According to the WTO, the U.S. had filed the case against India’s prohibition on importation of various agricultural products (including poultry) from the U.S. purportedly because of concerns related to Avian Influenza (bird flu). The U.S. had claimed that the ban was against WTO norms and had hurt its poultry exports to India.

Official sources said that the “options” now being considered by India include: (i) raising its concerns — over the “surprisingly aggressive” U.S. push for such trade sanctions — at high-level bilateral meetings in August (the Strategic & Commercial Dialogue) and October (Trade Policy Forum) and (ii) ensuring through discussions that the U.S. agrees to withdraw its efforts to seek an arbitration panel for assessing the quantum of trade sanctions, and instead give consent to India’s demand for a “sequencing agreement.”

The ‘sequencing agreement’ is to ensure that the matter is instead referred to a WTO ‘compliance panel,’ which will look into India’s claim that it has complied with the WTO appellate panel’s recommendations.

The sources said the retaliatory measures that India is planning include expediting internal preparations to file as many as 14 cases at the WTO against the U.S. alleging that renewable energy policies of many State governments in the U.S. have “very significant” domestic content requirements “violating” America’s obligations under the WTO agreements on Trade-Related Investment Measures as well as on Subsidies & Countervailing Measures.

“We (India) are exploring all options to protect our interests,” a senior official said.

The sources said Indian officials from the Department of Animal Husbandry, Dairying and Fisheries (Ministry of Agriculture & Farmers Welfare) and the Commerce Department, as well as U.S. officials from the office of the U.S. Trade Representative and the U.S. Department of Agriculture, had on July 20 held a video conference.

Health certificates

During the conference, India had clearly explained the notification issued by the Ministry of Agriculture & Farmers Welfare, related guidelines and the required health certificates. The Indian side explained that the norms were in line with the international (OIE) guidelines on Avian Influenza and that they complied with the WTO order. The sources said the U.S. did not raise any major objections during that conference, adding that India will, therefore, seek to know why the U.S. is now keen on imposing trade sanctions.

India had sought a ‘sequencing agreement’ with the U.S. before the June 19 deadline itself in the poultry case.

However, Washington rejected it saying it could not enter into such negotiations especially when India had not even put out its official notification at that time in compliance with the WTO ruling.

Bird flu

As against the June 19 deadline agreed at the WTO, India’s final notification (on poultry import) came only on July 8. In an interview to The Hindu on July 13, Commerce Minister Nirmala Sitharaman had said that when the case was going on at the WTO level, the Centre had received many representations from farmers in states such as Uttar Pradesh, Tamil Nadu and Telangana who had raised their concerns on such poultry imports.

The Centre also received legal advice on concerns including bird flu, she said. “Since the notification has come now, I am sure the U.S. will take note of it, and there wouldn’t be a basis for sanctions.”

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Printable version | Jun 16, 2021 2:35:17 PM |

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