New Delhi viewed Washington’s move as inconsistent with the WTO rules and had informed the multilateral body in 2018 about its plan to retaliate
The dispute settlement body (DSB) of the World Trade Organisation (WTO) has formed a three-member panel to examine a complaint by the US against India’s retaliatory tariff on 29 American goods last year.
Ironically, although the US has crippled the WTO’s dispute appellate mechanism by blocking the appointment of judges, the DSB is still functional. However, as per the established practice, the DSB’s findings cannot be binding on a losing party if it appeals against the verdict. Since the appellate mechanism is now paralysed, it’s unclear how the WTO will handle the matter.
In a communication late on Friday, the WTO said: “Brazil, Canada, China, Guatemala, the EU, Indonesia, Japan, Malaysia, Mexico, Norway, the Russian Federation, Singapore, Switzerland, Chinese Taipei, Turkey, Ukraine and Venezuela have reserved their rights to participate in the panel proceedings as third parties.”
India slapped retaliatory tariff on the US goods—including almond, apple, pulses, walnuts, and certain iron products—from June 2019 in response to the Trump administration’s 2018 move to impose extra levies on steel and aluminium supplies from countries, including India. New Delhi viewed Washington’s move as inconsistent with the WTO rules and had informed the multilateral body in 2018 about its plan to retaliate. But it still held back tit-for-tat action for around a year amid hopes for a trade deal with Washington, which didn’t materialise. The US had in July 2019 dragged India to the WTO, alleging that the latter’s move to hike import duties was inconsistent with the global trade norms.
The US had alleged that India’s move “appears to nullify or impair the benefits accruing to the US directly or indirectly” under the GATT 1994.
In an escalation of trade tussles, the US had rolled back export incentives from India under its GSP programme last year.