In a bitter reaction to India’s appeal against a WTO panel’s adverse ruling on the country’s domestic support measures for sugar and sugarcane producers, Australia has said it intends to oppose the appeal as it considers the panel to have been correct in its conclusions.

Putting in a submission at the WTO’s Dispute Settlement Body, Australia said it would oppose India’s appeal as the panel had “rightly ruled” that the prohibited subsidies under the production assistance, the buffer stock, and the marketing and transportation schemes, must be withdrawn.

“Australia wishes to note that it disagrees with all of India’s allegations of errors of law and legal interpretation in the panel’s report as set out in its Notice of Appeal and Appellant Submission,” the submission pointed out.

Based on a dispute filed by Australia, Brazil and Guatemala in 2019, a WTO panel, last month, ruled that India’s mandatory minimum prices for sugarcane (the Fair and Remunerative Price and State-Advised Prices) were non-exempt product-specific domestic support. It observed that since such support was in excess of the permitted level of 10 per cent of the total value of sugarcane production, India had acted inconsistently with its obligations under the Agreement on Agriculture (AoA).

The panel also found that the challenged schemes — the production assistance, the buffer stock and the marketing and transportation — were export subsidies and needed to be withdrawn.

‘Erroneous’ findings

Later in the month, India filed an appeal at the WTO’s Appellate Body, the top authority on trade disputes, claiming that the dispute panel had made “erroneous” findings about domestic schemes to support sugarcane producers and exports and the findings were “unacceptable” to it.

As the WTO Appellate Body is currently dysfunctional due to disagreement between WTO members on appointment of judges and the functioning of the body, India’s appeal can be taken up only when the issue is resolved. India can continue with the disputed measures till the Appellate Body resumes its function and examines its appeal, but Australia, by announcing that it would oppose the appeal once the Appellate Body is functional, has indicated that it would keep pursuing the matter, perhaps even bilaterally.

‘Selective view’

“Australia considers that the arguments put forward by India to support its interpretation of the WTO covered agreements are not supported by the text, object, purpose or context of those agreements. Rather, India takes a selective and exclusive view of a limited number of provisions of those agreements,” its submission said.

India’s sugar exports rose 20 per cent in 2020-21 sugar marketing year (October-September) to touch a record 7.1 million tonne.

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