The Hindu Business Line : US for mutual solution to shrimp dumping duty row

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US for mutual solution to shrimp dumping duty row

Our Bureau

Offers to conduct analysis on shipments from India

`Bond'ing problems
Washington offers to relax bond norms after conducting analysis.
But not all Indian exporters could gain from the move.
New Delhi for total relaxation of the procedure.

New Delhi , Dec 4

The US is trying to find a mutual solution with India on the controversy over levying of anti-dumping duty on shrimp exports.

The issue involves Indian exporters paying anti-dumping duty ranging from 4.94 per cent to 15.36 per cent for shipments to the US.

The issue became a little complex with Washington enforcing a Customs bond procedure from November 2004, wherein exporters had to execute a bond upfront along with the exports. The bonds are to be paid every year till 2007.

Probe

The US had imposed the anti-dumping duty after a probe by its Commerce Department in 2004 led to a finding that shrimps were being exported at "less than fair value."

Besides India, the duty was levied on Vietnam, Thailand, China, Ecuador and Brazil.

This move to find a solution comes despite India taking the issue to the WTO's Dispute Settlement Body and seeking the setting up of a panel to probe the matter.

Figures at talks

According to diplomatic sources, the issue figured during the meeting between Union Commerce and Industry Minister, Mr Kamal Nath, and US Deputy Trade Representative Mr Karan Bhatia last week.

`NOT AIMED AT INDIA'

Though India has taken up the issue at the WTO forum, the issue can still be negotiated bilaterally.

In fact, the WTO process allows discussion between two disputing nations before a panel is set up to probe a trade issue.

According to sources, the US is of the view that the bond procedure is not aimed at hurting the exporters, especially from India.

The problem has cropped up as some of the exporters, who set up importing houses in the US, did not pay the duty owed to the US Government and vanished.

Defaulters

"Hundreds of millions of dollars are due in such payment. The US Government decided to come out with this bond option to ensure such default does not take place," the sources said.

According to trade sources, Chinese exporters, in particular, have been found to be big defaulters of the payment.

A few Chinese exporters, who owed the US $450 million, absconded and it was then that the Government decided to act.

The bond procedure applies to all, including exporters from countries such as Thailand and Vietnam.

According to the sources, the US authorities had assured India that an analysis would be done at the end of the year and the procedure would be relaxed.

"It could exempt 95 per cent of the Indian exporters," they said, adding that India, however, was insisting on cent per cent exemption.

Individual analysis

"The US does not accept such conditions and the analysis will be done for each company. If any company has a clean track record, it should have no problem. The issue with India is stuck at this level. The problem with US law is that no particular person or country can be targeted."

The argument put forth by India against the bond is that the burden on individual exporters, ranging from $0.8 million to $5 million, is very high.

The US has begun a review of the dumping duty and three firms were chosen for inspection in July.

A final decision is expected only towards the year-end.

However, India has moved the WTO and on November 21 pressed for setting up a panel.

The anti-dumping duty has led to a 25 per cent fall in shrimp exports to the US, from around $400 million in 2003 to $300 million in 2005. During this period, the number of exporters to the US fell to 15 from 30.

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