Macro Economy

WTO: US rejects India’s request to join Russia in dispute against duties on steel, aluminium

Amiti Sen New Delhi | Updated on September 09, 2018

Firm stand The US is holding firm on its argument that the duties have been imposed due to security concerns   -  Udit Kulshrestha

Move will not augur well for bilateral talks between India and US, says expert

Signalling its unwillingness to be flexible on its decision to impose penal import duties on aluminium and steel from countries such as India, Russia and China, the US has rejected New Delhi’s request to be an interested party in the dispute filed by Russia against Washington’s move at the World Trade Organisation (WTO).

“Issues of national security are political matters not susceptible to review or capable of resolution by WTO dispute settlement,” the US said in a reply to India.

While the US has the authority to reject a member’s request to join consultations that another country has requested to hold with it on a matter of dispute, it will not have a say if the issue takes the form of a full-fledged dispute and a dispute settlement panel is established.

“If Russia asks for the establishment of a dispute settlement panel to resolve the dispute and India reserves its third-party rights, the US will not have the right to stall it,” a Delhi-based trade expert told BusinessLine.

Duty woes

Washington’s continued hard posture on its decision to impose additional duties on aluminium and steel unilaterally on a handful of countries doesn’t augur well for the bilateral talks India is having with the US to try to persuade it to do away with the duties, the expert added.

“The fact the US is holding firm on its argument that the duties have been imposed due to security concerns and no other country or institution should have a say in it indicates that it may show the same inflexibility in the bilateral talks it is holding with India to settle the matter,” the expert said.

Earlier this year, the US had imposed additional duties on imports of steel and aluminium from a handful of countries including India, Russia, China, Turkey and the EU to the tune of 20 per cent and 10 per cent respectively on grounds of security concern.

In response to the unilateral measure, India notified retaliatory duties worth $230 million on US imports of 29 items including almonds, apples and certain steel products on June 20, but put off its implementation till August 4 to give some time to the US to sort out the matter. It further extended the deadline by 45 days to September 17 when the issue could not be resolved by August 4.

No dilution

“It seems unlikely now that the US would revoke or dilute the application of import duties on aluminium and steel from India by September 17. One has to wait and see whether India will postpone implementation of retaliatory tariffs yet another time,” the expert added.

Consultations pending

India had also launched a dispute at the WTO earlier this year against the unilateral US measure by requesting consultations to settle the matter. If consultations fail, India will have the authority to ask for a dispute settlement panel to sort out the matter.

With Russia, too, requesting consultations with the US at the WTO on the same issue, India had requested in July to be a third party to the consultations.

Published on September 09, 2018

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