Japan on Thursday requested the World Trade Organization (WTO) to set up a dispute-settlement panel to investigate India’s allegation of dumping of steel products and imposition of safeguard duties on certain steel imports, according to a senior commerce ministry official. The official, however, said India is well prepared to counter Japan’s stance in any forum. Also, experts suggested that since WTO cases are settled with rulings that are ‘prospective’ in effect, any adverse judgment would not affect India significantly.
Japan claimed India violated WTO rules by imposing safeguard duties on hot-rolled (HR) coil steel products as the latter’s output and sales does not seem to have been impacted by any “sudden surge” in imports. Japanese exports of HR coils to India have plunged in recent months. Japan is supposedly taking these actions also to discourage other countries from imposing emergency measures such as fixing a floor price for imports. Japan is the second largest producer of steel in the world and exports half of its steel production.
Earlier, the two sides carried out the mandated 60-day period of bilateral consultations to resolve the issue through negotiations which turned out to be inconclusive. Japan went into consultation with India last December on two issues — minimum import price for certain steel products and anti-dumping safeguard duties slapped on imports of hot-rolled flat products of non-alloy and alloy steel by India. India imposed duties of up to 20% safeguard duty on some HR flat-steel products back in September 2015, and set a floor price in February 2016 for some steel product imports to prevent countries like China, Japan and South Korea from flooding the Indian domestic market with cheap steel products using predatory pricing — a practice by which import price is set lower than the actual cost of production. However, India ended the minimum import price in February, while the safeguard duties continued. Safeguard duties would continue till sometime in early 2018, after which it will be withdrawn.
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Informed sources said that the WTO’s dispute-settlement body (DSB) is expected to take up this issue not before April 19 and it will take up to an additional 25 days for Japan to submit its complaint to the DSB, which will be followed by a week of proceedings. India will have another month and a half time to respond to Japan’s complaint in the DSB. In all likelihood, hearing on the case will not begin before coming August. Experts suggest that by the time this case is concluded and a judgment is handed out, it will be well past the time period for which the safeguard duties were imposed.
It may be noted that India’s steel industry has been bearing the brunt of cheap imports owing to continued overcapacity in the global steel industry, and has therefore imposed quite a large number of anti-dumping duties.
The WTO DG, while on a recent visit to India, said countries are perfectly within their rights to use “WTO-compliant tools like anti-dumping measures” to protect its domestic industry.