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Business News/ News / World/  WTO issues mixed ruling in Indian challenge to US steel duties
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WTO issues mixed ruling in Indian challenge to US steel duties

WTO reversed much of an earlier ruling by a three-person panel which said US duties had wrongly penalized India for subsidising steel exports from Tata Steel

WTO’s appellate body still ruled that the US duties were in breach of WTO rules and it asked the United States to bring its rules into line. Photo: ReutersPremium
WTO’s appellate body still ruled that the US duties were in breach of WTO rules and it asked the United States to bring its rules into line. Photo: Reuters

Geneva: India has secured partial relief in its major trade dispute with the US at the World Trade Organization (WTO) over countervailing duties imposed by the United States Commerce Department on certain hot-rolled carbon steel flat products exported by Indian steel companies.

On Monday evening, the WTO’s highest legal court—The Appellate Body—issued a mixed but complex ruling in which it disagreed with India’s challenge against an earlier panel ruling that upheld the US’s countervailing measures on Indian hot-rolled steel flat products.

The dispute centres around India’s challenge to the US’s imposition of countervailing duties on certain hot-rolled carbon steel flat products from India. At the core of the dispute are the US’s CVD investigations which are treated as anti-subsidy actions initiated on 12 December 2000. The US commerce department subsequently imposed countervailing duties on 8 January 2002.

The US countervailing measures continue to remain in force even to date.

The US had imposed CVD duties on five steel companies from India. They include Essar Steel Ltd, Ispat Industries Ltd, Steel Authority of India Ltd (SAIL), Tata Iron and Steel Co. Ltd (now, Tata Steel Ltd) and JSW Steel Ltd.

The US countervailing duty orders targeted various Indian government programmes such as sales of input products, licensing schemes for mineral extraction, and financing arrangements. US also targeted entities established by the Government of India such as National Mineral Development Corporation (NMDC) and the Steel Development Fund.

On one major issue concerning whether the NMDC is a public body, the highest court disagreed with the US. Washington had argued that NMDC is a public body that is capable of acting at the behest of the Indian government to help the domestic steel companies. The Appellate Body has pointed that the determination of the US Department of Commerce that the NMDC is a public body is inconsistent with Article 1.1 of the Subsidies and Countervailing Measures (SCM) agreement.

But on other major issues raised against the earlier panel ruling, the highest court sided with the US’ actions. The Appellate Body, for example, has agreed with the earlier panel’s findings regarding whether India’s captive mining rights and Steel Development Fund (SDF) loans constitute financial contributions with the meaning of the SCM agreement.

Both captive mining rights and SDF loans, according to The Appellate Body, amount to a form of subsidy. The highest court also rejected India’s appeal on several issues concerning the US code of federal regulations that decide the US benchmarking mechanism for calculating benefit.

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Published: 08 Dec 2014, 10:23 PM IST
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