The Hindu : Business : India to consult coalition partners on WTO ruling

Online edition of India's National Newspaper
Friday, Sep 03, 2004

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Business

India to consult coalition partners on WTO ruling

By Our Special Correspondent

NEW DELHI, SEPT. 2. India plans to consult coalition partners in the Group of 20 before taking any decision in the wake of the ruling at the World Trade Organisation (WTO) against the U.S. on its anti-dumping law known as the Byrd Amendment.

Speaking to The Hindu, the Union Commerce and Industry Minister, Kamal Nath, said India would give a "constructive response" to the decision. Before taking any decision to levy fresh tariffs on U.S. products, he would consult with G-20 partners and study the issue carefully. However, he felt that the ruling showed that developed countries were taking action that affected the efforts to have free trade and fair competition, which were the "bedrock" of the WTO. Besides, he said it was thought that developing countries were at fault in the trade arena but this showed that it was actually the reverse.

The decision taken yesterday by the WTO's dispute settlement panel enables India along with eight other countries to impose higher tariffs against U.S. products. This would be in response to the Byrd Amendment in the U.S., which provides for distributing the funds raised from anti-dumping duties to the industries affected by the imported products as a kind of "compensation". Apart from India, the seven other countries, which are being allowed to retaliate, include Brazil, Canada, Chile, the European Union, Japan, Korea, and Mexico.

According to a statement issued by these countries, the WTO arbitrators have allowed them to retaliate up to more than $150 million against the U.S. for failing to comply with its international trade obligations.

In January 2003, the WTO ruled as illegal a piece of U.S. legislation commonly known as the "Byrd Amendment", under which anti-dumping and countervailing duties are distributed to the domestic companies that had requested or supported the imposition of those duties. The WTO gave the U.S. until December 2003 to comply with the WTO ruling but the U.S. missed this deadline.

The failure by the U.S. to bring its measure into conformity with WTO rules prompted eight WTO members — Brazil, Canada, Chile, the EU, India, Korea, Japan and Mexico — to request authorisation from the WTO to impose additional import duties on U.S. products or to suspend other obligations to the U.S. As a result of the latest decision, these countries can now exercise their right to retaliation "at any time deemed appropriate".

"The eight WTO members strongly urge the U.S. to act immediately to repeal the illegal Byrd Amendment," it is stated.

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