India will have to wait longer for the WTO’s verdict on its dispute with the US over the additional import duties imposed by Washington on Indian steel and aluminium in 2018. The WTO’s dispute settlement panel constituted on the matter has said that it needs three more quarters to finalise its report.

“The panel is in ongoing consultations with the parties regarding this dispute and does not expect to issue its final report to the parties before the third quarter of 2023,” the panel reported to the Dispute Settlement Body of the WTO recently. The panel was scheduled to give its report by 2022-end.

‘Wrongful’ duties

The delay would be disappointing for India as it has had no success so far in persuading the Joe Biden government to withdraw the “wrongful” duties imposed by the Trump regime on grounds of national security.

In March 2018, then-President Donald Trump imposed imports duties of 25 per cent on certain steel products and 10 per cent on aluminum against most of its trading partners, including China and India, on the ground that it was needed for national security purposes. 

Following mutual agreements reached with many of its trading partners such as Canada, Mexico, Australia, Argentina, Brazil, South Korea, the EU, the UK and Japan, the US either fully removed the additional duties, partially withdrew them or replaced them with a quota system for imports, partially removed or replaced with a quota system for imports from.

The penal import duties against certain countries, including India and China, however, continued. India filed a dispute against the US on the import duties parallelly with some other members doing the same.

WTO verdict

In December 2022, a WTO dispute settlement panel, in its verdict on cases filed by China, Norway, Switzerland and Turkey against Washington, ruled that the US decision to impose additional customs duties on steel and aluminium was inconsistent with global trade norms.

“The WTO verdict had given India hope that it too would get a favourable decision from the WTO panel in its case against the US as it was similar to those filed by China, Norway, Switzerland and Turkey. A favourable decision would also have strengthened India’s position in the bilateral discussion it is holding with the US on the matter,” a person tracking the matter told businessline.

But now, it will have to wait at least till October 2023 for a WTO decision.

“When the WTO had deferred a decision on India’s dispute against the US on steel in July 2022 till the end of the year, India was hoping that it would sort out the matter bilaterally with the US. However, during a recent visit to India, Arun Venkataraman, US Assistant Secretary of Commerce for Global Markets, stated that without addressing the “fundamental issue’’ of excess capacity and the behaviours that gave rise to the problem, the US will be unable to address the problem of customs duties.

“The Section 232 investigations in the US identified the global excess capacity and the consequences for how steel from other countries was being pushed into the US as a national security threat, posing an existential crisis for our steel and aluminium industry. The duties have been put in place to address those concerns and ensure a certain capacity utilisation on the part of those industries,” he said at a media interaction.

India’s export of steel and aluminium to the US had come down sharply following the imposition of the additional customs duties. In June 2019, imposed retaliatory import duties on 28 items it imported from the US in response to the losses suffered due to the fall in its exports of steel and aluminium.