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WTO Rules against India over Japan’s Complaint of Indian Safeguard Duty Imposition on Steel Imports

WTO Rules against India over Japan’s Complaint of Indian Safeguard Duty Imposition on Steel Imports
Mining News Pro - World Trade Organization (WTO) dispute panel largely upheld Japan`s complaint against a safeguard duty imposed by India on steel imports for two-and-a-half years.
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According to Mining News Pro -World Trade Organization (WTO) dispute panel largely upheld Japan`s complaint against a safeguard duty imposed by India on steel imports for two-and-a-half years.

According to a ruling published, in Dec’17 Japan had complained that India broke the WTO rules and urged India to take corrective action, even though the disputed duties ended in March this year. The corrective action is for potential duties retroactively to be put on imported steel.

The WTO panel said in its ruling that as India acted inconsistently with certain provisions of the GATT (General Agreement on Tariffs and Trade) 1994 and the Agreement in Safeguards, we recommend that, to the extent that the measure continues to have any effects, India bring it into conformity with its obligations under those agreements,"

Japan went to the WTO in 2016 to complain about the safeguard--an emergency tariff that WTO members can use to shield their industries against the threat of a sudden and damaging surge in imports. India set the duty at 20% in the first year, tapering to 10% in the final six months.

Use of safeguards are subject to strict criteria, and the panel said India`s reasons did not reach the required standard or show a rise in steel imports based on objective data.
The annual value of Japan`s export of hot-rolled coils, used in automobiles, construction and industrial machinery, to India came to 56.84 billion yen (USD 502 million) in 2014. But the figure plunged after India imposed the duties on some hot-rolled flat steel products in September 2015.

The WTO panel`s ruling should be adopted within 60 days, unless either of the parties appeals.

Japan, the world`s second-biggest steel producer, usually tries to deal with trade disputes through bilateral talks, but with global trade friction increasing, Japan`s defense of an industry that sells nearly half of its products overseas has become more vigorous. However, as India and Japan failed to resolve the issue in the bilateral consultation process, the WTO had set up the dispute resolution panel earlier this year.

The dispute assumes significance as India and Japan implemented a comprehensive free trade agreement in 2011. It gave easy access to Japan in the Indian steel market. The bilateral trade between the countries stood at USD 15.7 billion in 2017-18. Trade is highly in favor of Japan as the trade deficit stood at about USD 11 billion in that fiscal.


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