Kochi: India could have an edge in a case it is fighting with the US before the World Trade Organization’s (WTO) disputes panel according to an official at the commerce ministry who did not wish to be identified.
The case concerns the export of shrimp from India to the US and the “customs bond” levied by the US on Indian shrimp exporters over and above the anti-dumping duty. The anti-dumping duty—this is levied on exports that are priced at a level lower than the fair value of the product as defined by the country that is levying the duty—fixed for shrimp from India in the US is 10.54%. The customs bond is a cash (bank) guarantee calculated at 100% of the duty payable on total exports of the product in the past year.
India presented its case to the panel in Geneva in the first week of June. The final hearing is scheduled for 24 July and the panel will rule in October. India and Thailand, the other country affected by the bond, will have to make a second submission before the panel by 29 June, answering questions that have been raised.
“During the whole proceedings, where India made its presentation and the US countered it, almost all of the questions of the panel were directed to the US. This seems to be a clear indication that things could favour India,” the official said. He added that India was represented by K. Venugopal, a senior Supreme Court advocate.
The hearings of the disputes panel are confidential and the arguments made by either party are not made public.
According to the official, India argued that the customs bond was inconsistent with the trade obligations of the US under various articles of the General Agreement on Trade Tariffs (GATT), the anti-dumping agreement, the subsidies agreement, and also various agreements of WTO.
The US had sent notices to several seafood exporters, including Indian firms, for the first annual review of the duty in 2006, but 17 Indian exporters did not respond. The anti-dumping duty for these was fixed at 82% based on “adverse facts available”. American trade officials, the Indian official said, pointed to this high duty of 82% (and not the 10.54% duty levied on other Indian shrimp) as a reason for continuing the bank guarantee. India, he added, countered that these firms were irrelevant because they were not keen on exporting to the US, one of the reasons why they had ignored the earlier notice from the country.
The government official said that India’s arguments were based on facts provided by exporters’ group Seafood Exporters Association of India (SEAI) and the Indian government’s trade promotion body Marine Products Export Development Authority (MPEDA). Elias Sait, secretary general of SEAI which was directed by the commerce ministry to assist the Indian team in Geneva during the preliminary hearing, said SEAI and MPEDA had begun work collecting critical details and all other relevant material to back India’s argument. “So far, things have been encouraging,” Sait said.